Reinsurer Paris Re detailed its forthcoming $2 billion share flotation on Thursday, promising one of the French capital's biggest stock market listings so far this year.
Paris Re, which contains the former reinsurance activities of French insurer AXA, set an indicative price range of between 19.35-22.00 euros per share. Shares are due to start trading on July 13.
It said the initial public offering would raise around 240 million euros based on the mid-price of that range. It could raise up to 312 million euros if the greenshoe option is exercised.
Chief Executive Hans-Peter Gerhardt told reporters Paris Re would have a stock market value of more than $2 billion. Its official headquarter will be in Switzerland, although its main office will be in Paris.
According to a prospectus the company will have around 86 million shares in issue giving it a market capitalisation of around 1.8 billion euros ($2.4 billion) based on the mid-point of its indicative price range.
Gerhardt said the money raised would be mainly used to strengthen its balance sheet and help it retain business, rather than for acquisitions.
"We want to go where there is a good chance to make a good margin," he told reporters.
Reinsurance In Public Eye
The reinsurance industry has recovered after a bleak period following the 2001 attacks on New York's World Trade Center, which led to high losses throughout the sector, and a spate of deadly hurricanes in the United States.
The industry has seen a burst of merger and acquisition activity in recent months, such as French reinsurer Scor's $3 billion takeover of Swiss rival Converium.
Paris Re's stock market value will rank well below the market capitalisations of $30-$40 billion for the industry's biggest operators, Swiss Re and Munich Re, but Gerhardt said Paris Re would play a useful role in the market.
"Clients around the world are desperate to have a spread of placement. They want choice, they don't just want the big two or three players."
U.S. private equity companies Hellman & Friedman and Stone Point Capital will retain stakes of around 15 and 10% respectively in Paris Re after the flotation.
Credit Suisse and Citigroup are the lead banks working on the flotation. Other banks involved in the deal are ABN AMRO Rothschild, BNP Paribas, Goldman Sachs and Fox-Pitt, Kelton.