NEW YORK ( TheStreet) -- Citigroup's ( C) decision to go the IPO route with Primerica may signal a shift in its strategy for disentangling itself from non-core and troubled businesses. Rather than settling for whatever offers are available, it seems to have decided the public markets also present a viable option. Citi announced plans for the IPO of its financial services and insurance subsidiary, Primerica after Thursday's closing bell. In its S-1 filing with the Securities and Exchange Commission, the Duluth, Ga.-based firm said it was seeking to raise as much as $100 million through the sale. What's interesting is that Primerica is one of several businesses listed under Citi's so-called bad bank, Citi Holdings, a portfolio that is essentially full of assets Citi is, for the most part, seeking to unload for both quality and strategic reasons. The unit -- separate from its core Citicorp operations -- holds a combination of brokerage, insurance, and lending businesses as well as a pool of toxic assets. Citi has been successful at divesting some operations, such as its Japanese asset management unit, and part of its Smith Barney brokerage business through a joint venture with Morgan Stanley ( MS), but it's been rumored that finding buyers for other businesses like CitiFinancial and Primerica has been tough. "They must have shopped it around to competitors and the best bid offer was in their opinion was less than their perceived value of the business," says Harlan Platt, a finance professor at Northeastern University. "The market appears to be gaining comfort in buying IPOs based on recent experience including the Hyatt IPO and they may suspect that they would do better through this route. Hyatt is a good brand. Primerica is a good brand."
Platt added that he believes, if the IPO is successful, "they and others will sell off many assets" in this way. Citi declined to comment on whether other businesses are being considered for IPOs. The market for IPOs, both globally and in the U.S., has had a resurgence since the end of the summer, despite 2009 so far being one of the weakest years for IPOs since 1995, according to Dealogic. Year-to-date, U.S. IPO listings have totaled 49, while there were 51 listings in all of 2008 and 288 listings in 2007, the data provider said. Recent listings in the U.S. include Thursday's debut of Hyatt Hotels ( H) The company priced 38 million shares priced at $25 each in the highly anticipated deal, garnering $950 million for Hyatt. The stock priced slightly above the midpoint of its expected range of $23 and $26. It began trading last Thursday, and closed the week at $28, up 12%. Other U.S. companies coming to market in recent months include Dole Foods ( DOLE), Vitamin Shoppe ( VSI), AGA Medical ( AGAM), RailAmerica ( RA) and ZST Digital Networks ( ZSTN). On the whole, the returns on this year's IPOs have been iffy. Eleven of the 20 largest global deals are down since their debuts according to Dealogic. Data from Thomson Reuters shows the average share price return on U.S. listed IPOs stood at 7.2% as of Oct. 30, based on its count of 42 deals. David Trone, an analyst at Fox-Pitt Kelton Cochran Caronia Waller, estimates that the overall value of Primerica is roughly $1.6 billion. The plan according to the S-1 filing is for Primerica to transfer between 80% and 90% of its existing term life insurance policy holdings to Citi prior to the IPO's completion. The rationale behind this co-insurance agreement is to trim Primerica's balance sheet and make both the size of the IPO and company more manageable, Trone says. And while the registration statement indicates an IPO size of $100 million, "we believe the ultimate size of the IPO would be larger and depend on the equity market conditions" in the first quarter, Trone writes in a note. "Citi will most likely record a relatively small gain on this transaction." That's welcome news for Citi shareholders, who likely hope it's a sign of things to come. --Written by Laurie Kulikowski in New York.