The sale of one of Axa’s US businesses, which will be used to fund the French insurance giant’s purchase of XL Group, is likely to bring in far less than it initially expected.
In a statement late last night (9 May), Axa said the offer price for its US financial services business AXA Equitable Holdings had been set at $20 per share, valuing the IPO at around $2.75bn.
In an earlier statement, Axa had said it was expecting the IPO to price at between $24 and $27 per share when it lists on the New York Stock Exchange today.
The listing will see Axa sell 137.3mn shares. In addition, Morgan Stanley, JP Morgan, Barclays, Citigroup and others that are underwriting the floatation will have a 30-day option to buy up an another 20.6 million shares.
Axa Equitable Holding has around 12,200 staff and more than $670bn in assets under management through its two main businesses Axa Equitable Life and AllianceBernstein.
Together, the firms provide retirement advice and investment management services.
The news follows an announcement from Axa late last month that it had secured around $3.2bn of new funds from a reorganisation linked to the pending IPO.
“Axa announced today that Axa Equitable Holdings, Inc. has successfully completed its pre-IPO reorganization transactions, including the repayment of all internal loans provided by Axa Group and the purchase of Alliance Bernstein units previously owned by Axa SA and its affiliates,” the firm said in a statement on 26 April.
“Consequently, Axa SA received $3.2bn which will contribute to the financing of the XL Group acquisition, announced on March 5, 2018.”
Last year Axa announced it would sell off its US life insurance unit as well as its 64 percent stake in New York-based asset manager Alliance Bernstein to raise cash for deals.
The French insurance giant also has access to an $11bn revolving loan facility should it struggle to either IPO the US unit or raise subordinated debt to finance the XL deal, according to a Securities and Exchange Commision filing from XL. This was reduced to $8.54 following a EUR2bn debt issue.