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Hancock IPO opens flat
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January 27, 2000: 11:10 a.m. ET
Insurer raises $1.7B in eighth-largest U.S. initial public offering
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NEW YORK (CNNfn) - The Wall Street debut of life insurer John Hancock, the 8th-largest IPO in U.S. history, received a muted initial response from investors Thursday.
Shares of John Hancock (JHF), the 13th-largest U.S. life insurer, rose 11/16 to 17-11/16 Thursday morning.
The Boston-based company is offering 102 million shares, about 31 percent of the company, as the final stage of its conversion to a publicly traded firm from a mutual company owned by its policyholders. The company has renamed itself John Hancock Financial Services.
The offering, something of a rarity in an Internet-saturated IPO market, will net the company more than $1.7 billion. It is the second-biggest offering in the U.S. banking and insurance sector, after Goldman Sachs' $2.9 billion IPO last year.
Analysts say that unlike many of the highflying dot.com IPOs hitting the market, the insurer will be a long-term performing stock that has little potential for a short-term pop.
John Hancock's offering price of $17 falls in the middle of the $16 to $18 range the company forecast earlier this month, but close to the bottom of the $15 to $25 range forecast in December.
At the set share price, the IPO would give the company a market capitalization of $5.6 billion.
John Hancock has annual revenue of about $8 billion from its life insurance, annuities, mutual fund and asset management businesses.
On Wednesday, John Hancock settled a dispute with the State of New York Insurance Department over the way it is distributing shares to policyholders. The department gave the go-ahead to John Hancock to proceed with the IPO on the condition it resolves its legal disagreement with another life insurer, Mutual of America.
Mutual of America says it holds a group annuity policy that makes it eligible to receive 1.9 million John Hancock shares, worth $32.3 million at the set offering price.
John Hancock contends that the insurer is not entitled to shares.
While John Hancock's IPO is large, it is likely to be dwarfed by Metropolitan Life Insurance Co.'s IPO, scheduled for late March.
MetLife Inc., as the insurer will be known, is the No.2 U.S. life insurer and is set to raise $6.5 billion, which would make it the largest IPO in the United States.
-- from staff and wire reports 
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John Hancock
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