Friday, May 23 14:46:52
Saga, a provider of insurance and holidays to Britain's over-50s, raised 550 million pounds after selling shares at the bottom of a range that it used to canvass investors.
The shares were sold at 185 pence apiece, giving Saga a market value of 2.1 billion pounds, the Folkestone, England- based company said in a statement today. It had initially planned to sell stock for as much as 245 pence each. The shares erased early gains of as much as 2.2 percent and were little changed at 11:30 a.m. in London trading.
Saga's pricing comes amid waning appetite for initial public offerings in the U.K. following the underperformance of several private equity-backed companies in the past 12 months. Infinis Energy Plc and Pets at Home Group Plc are both trading below their listing prices, while U.K. retailer Fat Face Group Ltd. cancelled its planned IPO yesterday.
"Even at the bottom of the range, I didn't like" that price, said George Luckraft, a fund manager at Axa Framlington in London, which manages about $76.3 billion. "They tried to soup it up as non-insurer, when so much of the business is insurance."
Saga Executive Chairman Andrew Goodsell had said that the company will be considered by investors as part of the specialised consumer services industry, even though most of its earnings come from home and motor insurance. The proceeds from the IPO are being used to reduce debt to 700 million pounds. (Bloomberg)