Liberty Financial Cos. is planning a secondary public stock offering of 2.5 million common shares that could raise as much as $125 million.

The stock will be sold by an indirect subsidiary of Liberty Mutual Insurance Co. and certain other stockholders of Liberty Financial, the company said Tuesday.

Liberty Financial Cos., a Boston-based asset management company with more than $47 billion under management, went public in 1995-the same year it acquired The Colonial Group.

In recent months, Liberty executives have said they wanted to increase the company's market liquidity, possibly through a secondary offering. Such an offering could raise Liberty's stock price by putting more of its shares in circulation.

At present, about 19% of Liberty's stock is publicly traded. That percentage will rise to 26% in a month or two when the offering is made.

The vast majority of Liberty's stock is owned by a subsidiary of Liberty Mutual Insurance and will continue to be after the offering.

The managing underwriters for the offering are Merrill Lynch & Co.; Goldman, Sachs & Co.; Paine Webber Inc.; and Fox-Pitt, Kelton Inc.

Shares of Liberty's common stock closed at $50 Wednesday, down 12.5 cents. Liberty officials declined to comment on the offering, as a registration statement relating to the securities has been filed with the Securities and Exchange Commission.

Liberty manages an array of fixed, variable and indexed annuities, private and institutional accounts and 67 mutual funds for more than 1.4 million investors worldwide.

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