New York (CNN/Money) -
Whatever the weather this week, investors will be sure to remember the umbrella.
Travelers Property Casualty Corp., the venerable insurance company with the red umbrella trademark, is leaving the Citigroup fold with an initial public offering which is expected to raise nearly $3.7 billion.
"It's another instant blue chip," said John Fitzgibbon, editor of IPO Desktop.
Travelers would be the largest insurance IPO ever and will be in good company with its debut, as recent insurance offerings have been strong. Prudential Financial Inc. (PRU: Research, Estimates) raised $3 billion on Dec. 13 and rose nearly 7 percent on its first day on the New York Stock Exchange.
But analysts said all the attention on Travelers may not translate into a strong first-day gain, especially considering the size of the offering and the uncertainty of the overall market.
"It's a financial transaction," said David Menlow, president of IPOFinancial.com. "Let's not forget that Travelers has already been public."
Travelers Group merged with Citibank in 1998, forming the Citigroup empire which also includes brokerage Salomon Smith Barney, the lead underwriter for the deal.
Citigroup plans to sell 20 percent of Travelers with the IPO, with the rest of the company spun off to Citigroup shareholders by the end of this year.
The Travelers Property Casualty business represents about 8 percent-to-10 percent of Citigroup's earnings but is a slow-growing unit within the company's fold. In 2001 Travelers had revenue of more than $12 billion and net income of $1 billion.
According to analysts, the IPO and spinoff will allow the company to pursue other expansion opportunities.
The insurer is looking to sell 210 million shares between $16 and $19 per share and trade as "TAP.A" on the NYSE.
Along with lead manager Salomon, the company has 14 co-managers working on the deal.
"This is going to be a great pay day for 15 managers," Fitzgibbon said.
But Travelers is not the only blue-chip multibillion-dollar offering in the cards this week.
Alcon Inc., the largest maker of eyecare products in the world based on sales, is looking to raise more than $2.3 billion and analysts said they were impressed by the company's leadership position in its space.
"Travelers is the big name, but I think the big stock will be Alcon," Menlow said.
"This company just keeps on growing," he added.
"It's the biggest company in its field and it's going to have a lot of institutional interest," Fitzgibbon said.
Swiss-based Alcon is being spun of by conglomerate Nestle. In 2001 the company had $2.7 billion in sales and net income of $315 million.
In its filing with the Securities and Exchange Commission, the company said it focuses on three product areas, pharmaceutical, surgical and contact lens and vision care.
Alcon plans to price 69.75 million shares between $31 and $35 per share. Led by Credit Suisse First Boston and Merrill Lynch the company will trade as "ACL" on the NYSE.
The last offering of the week is Rio de Janeiro, Brazil-based mining firm Valley of the Rio Doce Co., which expects to raise about $1.78 billion pricing more than 68.5 million American depositary receipts (ADRs) at $25.92.
The company says it is one of the largest producers and exporters of iron ore. Led by Merrill Lynch and ABN Amro, Valley of the Rio Doce will trade as "RIO" on the NYSE.
According to Fitzgibbon, large, profitable offerings are the trend so far this year.
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"The numbers are coming up quality, with good aftermarket performance," he said. "People who are overlooking this market are missing out."
But Menlow said that won't be the trend for the whole year, and with the number of new filings coming into the system improving the IPO market is ready to get going.
"I think (the IPO Market) is ready to impress a lot of people who have (justifiably) been skeptics over the months," he said.
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