Just Retirement shares get off to sluggish start

David Hellier
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SHARES in Just Retirement, the annuity and equity release provider majority owned by private equity group Permira, traded at slightly below issue price yesterday as the market drew comparisons with rival Partnership.

Partnership, which floated in June, saw its shares soar to a hefty premium after joining the public markets only to see sentiment turn against it after a set of disappointing results.

Advisers to Just Retirement, led by Deutsche and Nomura, priced its deal at 225p, well shy of the 250p high point once discussed as a possibility for an issue price. But even the 225p looked slightly on the high side to the market, as shares slipped on first day of trading, at one point hitting 220p.

“I think there’s a good management team here and there’s a good deal of visibility about the business going forward but on the day it looks like the pricing has been pitched a bit too fully,” said Barry Gibb, an analyst at Beaufort Securities.

Market watchers will be slightly concerned by the reaction to this latest new issue since most of the recent deals have been characterised by very strong early trading, highlighted by the float of Royal Mail, which rose 50 per cent in its first week.

Permira sold 10.2m shares in the deal while board directors were restricted to selling one third of their holdings each.

Chairman Tom Cross-Brown, a former investment banker at Lazard and a veteran of the asset management business, sold no shares at all.

The biggest seller on the company side was operations director Chris Berryman, who sold 1.7m shares to raise nearly £4m. Berryman founded the company in 2004.

The group itself raised £280m net of underwriting commissions and fees. Permira will retain a 62.4 per cent shareholding in the group unless an over-allotment option is exercised.

There will be some discussion as to whether the company, Permira and its advisers would have done better to price the deal a little lower to attract some early investor support.