Saga’s adviser proposed higher issue price for the group’s shares

David Hellier
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BANKERS to Saga, the insurance to travel company for the over-50s that has seen its share price fall below its issue price, were last night arguing over where the responsibility lies for what is looking like a botched flotation.

As shares in the group fell a further 5.5p yesterday to 172.5p, far below the 185p issue price of just two weeks ago, it emerged yesterday that right up until the final pricing decision, John St John, who acted as an independent financial adviser to the group, was advocating a price of more than 190p despite a poor reception to the share issue from the institutional investors.

St John’s suggestion was rejected by banks, including Credit Suisse, Citigroup, Goldman and Bank of America Merrill Lynch, on a conference call. The bankers all favoured a lower price.

Andrew Goodsell, Saga’s executive chairman, also consistently argued in favour of a realistic issue price in the hope of achieving a positive aftermarket for the group’s shares.

The Saga flotation is being blamed for adversely affecting the sentiment towards new issues. Andy Brough, the veteran fund manager, has said that Saga “has killed the market for the upcoming new issuances”.

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