The largest U.S. initial public offering scheduled this year was pulled from the market Wednesday, reports the Wall Street Journal. Liberty Mutual Agency Corp., which was scheduled to raise as much as $1.3 billion in its IPO and trade on the Nasdaq on Thursday, instead postponed the deal, with the insurer citing an unfavorable environment for "receiving appropriate value for the business."
Bloomberg reports that demand was less than the company had projected for a unit that sells policies through agents. Liberty was hoping to raise the $1.3 billion by selling 64.3 million Class A shares at $18 to $20 each, according to filings with the U.S. Securities and Exchange Commission. Citigroup Inc. and Bank of America Corp. were leading the offering, reports Bloomberg.
Liberty’s situation illustrates how selective investors remain when it comes to IPOs, notes the Journal. The company's decision follows several deals where buyers were willing to pay prices at the high end or above range, with enough demand left to propel the stocks even higher on their first days of trading.
Liberty showcased strong revenue gains throughout the economic downturn. And while Liberty Mutual managed to increase its revenue in the downturn, it didn't occur at the same fast pace or in a rapidly growing industry like the ones investors favored recently. Liberty said that it had enough money to operate its business "successfully" without needing additional IPO funds.
According to the Journal the offering was scheduled to be the first deal that raised more than $1 billion in 2010.
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