AIG is planning to cut the valuation of Corebridge, its life and asset management business, by more than 30 per cent as the carved-out company attempts to reopen the US market for initial public offerings with the first major listing since May.
The US insurance group on Tuesday said it aimed to sell 80mn Corebridge shares at between $21 and $24 a share, raising between $1.7bn and $1.9bn. The company plans to list on the New York Stock Exchange later this month.
Such a price would value the company at between $13.5bn and $15.5bn, compared with the $22.2bn valuation it secured in an investment from private equity group Blackstone last November.
The reduced price reflects the broader slide in equity prices rather than a material change in Corebridge’s business.
The S&P 500 stock index has fallen about 15 per cent since the deal with Blackstone was struck, and shares in recently listed companies have been particularly badly hit. The Renaissance IPO index was down 44 per cent in the first eight months of the year.
The US IPO market has been almost entirely frozen since the start of the year, and Corebridge’s offering will be closely watched by bankers and private companies as a test of investor appetite ahead of a wider restart.
Corebridge was widely seen as a prime candidate to reopen the market, with bankers hopeful that its large size, history of profitability and the backing of its parent company would make it a relatively safe bet compared with the lossmaking tech groups that have dominated IPOs in recent years.
“It’s a well known company with a solid business. We think the time is right and we are confident,” said one person familiar with the process.
Corebridge reported revenue of $16bn in the first six months of 2022, with net income of $6bn.
Just two companies have raised more than $500mn in US IPOs this year — private equity group TPG in January and healthcare group Bausch & Lomb in May. Bausch had also been touted as a strong candidate to reopen the market but priced below its target range, and the poor performance led many companies to put their plans on hold for several more months.
AIG last month said it had delayed the listing of Corebridge because of the “high degree of equity market volatility” in May and June.
Peter Zaffino, AIG chief executive, said when the group reported second-quarter results last month that the deferral had given it time to “solidify the capital structure of this business as a standalone company”.
AIG has gone through several bouts of restructuring since its $185bn taxpayer rescue during the 2008 financial crisis, selling businesses in areas from consumer finance to aircraft leasing.
