According to a recent Barron’s article, ING may be a legitimate candidate for a takeover. The article cites a report by a BTIG analyst who thinks the stock is undervalued. ING, now trading as Voya, went public in late May at $19.50/share and is now trading in the mid-$20 range.
ING’s Dutch parent was forced to sell the firm under the terms of an agreement with European regulators, and had recently reduced its stake to 71% when underwriters exercised their right to purchase an additional 4%. By the end of 2014, ING’s interest needs to drop to 50%.
Most insurance companies trade at book value, Barron’s noted. ING’s book value is $41 and it is trading at a relatively low 10 times profit. Return on capital is less than 10% and there is still $42.5 billion in variable annuities sold before 2009, though reserves seem adequate.
So if ING is ripe for a takeover, who will buy it? With private equity firms flush with cash and interest rates low, could it go private?
