INSURER Saga is set to put retail investors at the heart of the largest UK stock market float since Royal Mail, as it gears up to publish plans to list the firm in London as early as next week.
Saga’s owner Acromas, which also owns the AA, is preparing to offload as much as £1.5bn in the listing to help cut its debt pile, in a share offering set to value the business at about £3bn.
Customers of the over-50 insurer and holiday provider have been set a minimum investment of £1,000 in shares, with Bank of America Merrill Lynch mandated to run the process with retail specialist Solid Solutions.
It is thought around £1bn worth of interest has been received from retail investors alone, suggesting the Saga float could top interest seen from retail investors for Royal Mail shares when it listed last autumn.
Saga’s customer base is considered the perfect audience for a share sale, given their age and wealth. “The great thing about Saga customers is that they’re rich and old,” said one person familiar with the plans.
Institutional investors are also being offered shares in the sale, which is set to cut Saga’s debt pile from 5.1 times earnings to between three and 3.5 times earnings.
Saga’s parent Acromas is owned by private equity firms CVC Capital Partners, Charterhouse and Permira.
The float comes on the back of a debt refinancing deal completed by Saga last week which was designed to cut its debt levels even further.
The company’s debt levels are down from highs of around 10 times its earnings when the private equity groups first took control of Saga and the AA.
A Saga spokesman declined to comment on the company’s plans but said: “It’s been well documented that Saga has been considering a flotation but no decision has been taken on timing.”
David Hellier, Michael Bow