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Liberty Mutual Group is delaying the initial public offering of its property and casualty insurance arm Liberty Mutual Agency Corp. because of a poor economy.
Liberty Mutual Agency Corp. was set to be the largest IPO to debut in the United States so far this year, and was expected to raise about $1.22 billion US.
The company Wednesday cited a stalled economic recovery, a volatile stock market and undervalued property and casualty insurance stock prices. It said that the environment for valuing the company was "unfavorable."
Liberty Mutual Group Chief Executive Edmund Kelly said in a statement that the delay would not affect the business or daily operations of the company and that Liberty Mutual has "more than adequate" capital to conduct its business.
"What they are trying to do is transfer the blame for this situation to the market," said David Menlow, president of IPOfinancial.com. "There were probably some unrealistic valuations that were put on the company to start with."
The S&P 500 is closing the quarter with a more than 10 percent advance after falling 11.9 percent in the previous quarter, while the last five months have seen up or down swings of at least 4.7 percent each.
The benchmark is up 2.5 percent year-to-date.
Liberty Mutual Agency Corp. is the 10th largest writer of property and casualty insurance in the United States. It had planned to sell 64.3 million shares for $18 to $20 each.
This week, in which nine IPOs were expected to price and trade in the United States, is seen as crucial for setting the tone for the fall U.S. IPO market.
Underwriters on the Liberty Mutual Agency Corp. IPO were led by Citi and Bank of America Merrill Lynch. The shares were expected to trade on the Nasdaq under the symbol "LMAC."