30th Apr 2014 15:57
LONDON (Alliance News) - Saga PLC Wednesday said it intends to float on the stock exchange, with the offer set to give the over-50s insurance provider and travel agent the largest market capitalisation of any London IPO so far this year at GBP2.2 billion.
Saga, which also offers cruises and holidays, savings and share dealing, and even a magazine, said it wants to raise a net amount of about GBP550.0 million which it will use to reduce its net debt to about GBP700.0 million. The offering will be made available to both retail and institutional investors.
Companies are flocking to the public markets amidst warming investor sentiment towards equities, with high-profile names such as Just Eat PLC, Pets at Home Group PLC and Poundland Group PLC already floating earlier this year.
Set for the London Stock Exchange's main market, Saga also said it is making the offer in order to increase its profile in consumer and investor circles. Saga added that it is targeting a free float of at least 25%, which with the GBP550.0 million that Saga hopes to raise implies a total market capitalisation of GBP2.2 billion.
The IPO will also mark a partial realisation for private equity owners Charterhouse, CVC and Permira, as well as some of its employees.
Saga said its underlying earnings before interest, tax, depreciation and amortisation increased to GBP222.4 million in the financial year ended January 31 from GBP213.7 million a year earlier.
The company said its current intention is to target an initial dividend payout ratio of approximately 40-50% of net income, split one-third and two-thirds between an interim and final dividend.
Despite being well known for insurance, Saga said it expects to be included in the FTSE UK Index Series within the Specialised Consumer Services sub-sector because of the breadth of products it provides.
Citigroup Global Markets Ltd, Bank of America Merrill Lynch, Credit Suisse Securities (Europe) Ltd, and Goldman Sachs International are leading the IPO.
JP Morgan Cazenove and UBS Ltd join them as joint bookrunners.
Investec Bank PLC is joint lead manager, while Mizuho International is co-lead manager.
Meanwhile, Sprue Aegis PLC, which makes smoke and carbon monoxide detectors, Wednesday began trading on the AIM market of the London Stock Exchange, raising GBP8.0 million before expenses after placing 4.0 million shares in as part of its move from ISDX.
Sprue Aegis shares closed Wednesday at 233.00 pence, 33.00 pence ahead of the placing price.
By Samuel Agini; [email protected]; @samuelagini
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