Specialist insurer Phoenix has announced a £950m rights issue which is intended to fund its £2bn purchase of Standard Life Aberdeen’s insurance arm.
Phoenix is to pay Standard Life Aberdeen £1.971bn upon completion of the deal to acquire Standard Life Assurance Limited (SLAL), which excludes a dividend of £312m paid by SLAL to Standard Life Aberdeen prior to completion.
Standard Life Aberdeen will take a nearly 20 per cent stake in the enlarged group.
The rights issue, which will help fund the deal, will result in the issue of 183,522,385 new shares, representing approximately 46.7 per cent of the existing share capital of Phoenix.
The rights issue will be on the basis of seven new shares at 518p per new share for every 15 existing shares.
The underwriters for the deal are banks HSBC, Merrill Lynch International, JP Morgan Securities and BNP Paribas.
Yesterday Standard Life Aberdeen revealed plans to return £1.75bn to its shareholders following the sale of SLAL to Phoenix.
However, the plan failed to impress investors with its share price falling 2.5 per cent yesterday following the announcement.