* AXA Equitable IPO priced below target range
* AXA says IPO in line with XL Group financing plan
* Jefferies analysts say extra financing needed
* AXA Equitable stock below IPO price, AXA flat (Adds Jefferies note, link to Breakingviews column)
NEW YORK/PARIS, May 10 (Reuters) - AXA's listing of its U.S. division raised less than targeted, but the French group said the proceeds were enough to ensure it can pursue a $15.3 billion acquisition of XL Group.
Europe's second-biggest insurer by market capitalisation behind Allianz said it had raised $2.75 billion on Wednesday through the initial public offering (IPO) of AXA Equitable Holdings Inc at $20 per share, below a target range of $24-$27, as well as a $750 million convertible bond.
"The transaction is perfectly in line with the financing plan of the acquisition of the XL Group," AXA spokesman Emmanuel Touzeau said on Twitter on Thursday.
Jefferies analysts, however, said in a note that the IPO pricing pointed to a financing gap and any shortfall could mean having to issue more debt.
"With 3.4 billion euros still required to cover the XL purchase, AXA will need to find an alternative source of funding for 300-600 million on our calculations," Jefferies said.
AXA Equitable shares opened at $19.75 and remained below the IPO price in late morning trading, while AXA stock closed up 0.13 percent at 22.37 euros.
Although it fell short of AXA's earlier expectations, the IPO is still the biggest in the United States so far in 2018 based on the proceeds raised, Thomson Reuters data showed. The listing values the U.S. entity at $11.22 billion.
The AXA Equitable flotation and the XL purchase are a test for Chief Executive Thomas Buberl, who after almost two years at AXA's helm is striving to make his mark.
Faced with tighter regulation and low investment returns, AXA is seeking growth in areas such as property and casualty insurance for businesses, capital-light savings products, health insurance, as well as in Asia.
The acquisition of commercial insurer and reinsurer XL Group would see property and casualty insurance (P&C) rising to half of AXA's earnings, from 39 percent now.
Investors appear unimpressed with the XL deal, announced in March. AXA's stock is down 9 percent in 2018, underperforming the European insurance index, which is up 3.3 percent, and reflecting a view among analysts that it is paying a high price for XL and that its debt ratio is set to become stretched.
AXA Equitable was not the first U.S. insurance IPO this year to price below its target range, after Goosehead Insurance Inc did the same in April.
Investors have previously voiced concerns about the exposure of U.S. insurers to the long-term care (LTC) industry, pays out for end-of-life medical care, such as when a person needs assistance bathing or feeding themselves.
AXA Equitable offers such protection to clients through a rider on life insurance products. It is one of America's oldest life insurers, with roots going back to 1859 in New York. AXA acquired the business in 1992.
AXA launched the IPO in a tough market that has seen some players withdraw their offerings amid lackluster demand. Shares in life insurance peers such as Prudential Financial, MetLife, and Lincoln Financial have been under pressure following weak earnings results.
Morgan Stanley, JP Morgan Barclays and Citigroup are the main investment banks involved in the IPO. (1 euro = $1.1934)
(Reporting by Joshua Franklin in New York and Maya Nikolaeva in Paris Additional reporting by David French in New York and Kanishka Singh in Bengaluru Editing Richard Lough and Alexander Smith)