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Prudential to launch IPO
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December 17, 2000: 10:20 a.m. ET
Insurance firm expected to announce plans for restructuring, IPO: Report
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NEW YORK (CNNfn) - In what is expected to be one of the largest initial public offerings in U.S. history, the Prudential Insurance Company of America will announce Monday that it is restructuring itself to issue stock and take the 125-year-old company public, according to a published report Sunday.
The New York Times reported that Prudential will unveil a plan that will give the company's 11 million policyholders a share of accumulated profits of more than $19 billion, which they will be allowed to take in the form of cash or stock. Most are expected to choose stock, which would eventually make Prudential one of the country's most widely held issues, the Times said.
The restructuring effort vaults Prudential into the ranks of other insurance companies such as Boston-based John Hancock Financial Services and New York-based Metropolitan Life that have successfully demutualized and raised additional capital for expansions and acquisitions.
 It's been no secret that Prudential has wanted to turn itself into a publicly traded company. More than three years ago, it unveiled its intentions to follow through on demutualization -- a process that takes ownership away from individual policyholders and places it in the hands of financial markets.
Prudential Chief Executive Art Ryan disclosed the long-expected decision to go public Friday afternoon in a closed-circuit television address from the company's headquarters in Newark, N.J., the Times reported. It was broadcast to the Prudential's 60,000 employees across the country.
Last Tuesday, Prudential's 23 directors unanimously authorized Ryan to go ahead with the plan, which will require both public hearings and the approval of Karen L. Suter, New Jersey's chief banking and insurance regulator. It will also need the approval of Prudential's policyholders.
Prudential, whose official slogan bills itself as the "rock solid choice for investments and insurance," has long focused primarily on life insurance, but now also offers annuities, a real estate brokerage, property and casualty insurance and investment management. An IPO will restructure the insurer to help it better adapt to the competitive financial services environment as well as providing Prudential with currency for acquisitions.
The insurance industry has produced some of the largest IPOs this year. MetLife Inc. floated a $2.8 billion issue back in April and John Hancock Financial Services Inc. produced a $1.7 billion deal in January. The large deals typically produce little pop in their first day, but then surge. MetLife (MET: Research, Estimates) gained 3.5 percent in its first day but has since nearly doubled, while John Hancock (JHF: Research, Estimates) rose 4.4 percent in its debut but has since risen 75 percent.
Shares of MetLife gained $1 to $35 Friday, while shares of John Hancock rose 56 cents to $36.38. 
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Prudential
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