Partnership’s Groves to net £16m from float

THE CHIEF executive of Partnership Assurance could be worth as much as £80m when the company makes its stock market debut next month, with banks valuing the life insurer at up to £1.6bn.

Steve Groves has a five per cent stake in the business, which yesterday kicked off its investor roadshow with a price range of 325p to 400p.

He will sell a quarter of his holding as part of the float, meaning that even if the initial public offering (IPO) only hits the lower end of the price range he will receive a personal cash injection of around £16m.

Partnership is on track to make its market debut within the next fortnight.

Earlier this month Groves told City A.M. that he expects “to be locking up a material proportion of my stake for a period of time” and intends to stick with the business.

A valuation range of £1.3bn-1.6bn will put the company, which derives most of its revenue from selling generous annuities to people with reduced life expectancy, straight into the FTSE 250.

Private equity business Cinven, which owns 80 per cent of Partnership, stands to make a strong profit on the sale. It bought its stake for £170m in 2008 and could now gain up to £1bn after just five years.

Partnership plans to raise £120m from the sale of new shares to clear its debt pile and ensure it meets the minimum requirement of a 25 per cent free float to ensure a premium listing on the London Stock Exchange. 

Subsequent tranches of shares could then be offloaded in the days following the IPO, subject to market conditions and the approval of Morgan Stanley and Bank of America Merrill Lynch, the banks who are running the sale.

Partnership recently recorded a 42 per cent rise in year-end operating profits to £112.1m and said further growth is still to come.