Citigroup Inc. (NYSE: C) or Primerica Inc. (NYSE: PRI)?… The answer is both or either.  The financial supermarket is about to have one less aisle.  Citi is spinning off the life-insurance and mutual-fund brokerage arm via an initial public offering that raised close to $320 million.  The offering will be 21.36 million shares at $15.00 per share, which is a higher share count than the 18 million shares originally projected and above the $12.00 to $14.00 range after the offering saw strong investor demand.

In addition to the spin-off via an IPO, Citigroup will sell 17.21+ million shares of Primerica to private equity firm Warburg Pincus LLC along with warrants for up to another 4.3 million shares at an exercise price per share equal to 120% of the per share public offering price.

Primerica’s 2009 profit was up almost 200% to about $495 million after seeing fewer write-offs, writedowns, and lower charges against its investments.

After the IPO, depending upon overallotments and dilution, Vikram Pandit and friends at Cit will have a stake of 32% to 46% stake.  The total shares outstanding will be 75 million shares.

For those who like to see firms coming public receiving all the proceeds, this may be a different IPO than that.  Primerica receives no new working capital nor any operating capital.

The underwriting group is huge here.  Citi is the book-runner; co-lead managers are UBS, Deutsche Bank, and Morgan Stanley.  Co-managers are KBW, Macquarie Capital, Raymond James, Sanler O’Neill, SunTrust Robinson Humphrey, ING, and Willis Capital Markets.

JON C. OGG

Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.