Delta Lloyd IPO to net Aviva 1.1bn
Life-insurer Aviva looks set to pocket €1.2bn (£1.1bn) when it floats Dutch unit Delta Lloyd in western Europe’s largest initial public offering (IPO) this year.
“This step will free up capital for us to use elsewhere and give us the option of exploring further growth opportunities,” said Aviva chief executive Andrew Moss.
Delta Lloyd shares are set to start trading on Euronext’s Amsterdam exchange on 3 November at between €15.5 and €19 each, valuing the business at €2.6bn to €3.1bn, Aviva said yesterday.
About 42 per cent of Delta’s shares will be sold, leaving Aviva as its biggest investor with 57 per cent, with Dutch charitable trust Fonds NutsOhra holding the balance.
At the upper end of the price range, the shares are at a 24 per cent discount to Delta Lloyd’s own estimate of its market-consistent embedded value (MCEV), a measure of an insurance company’s worth.
Delta Lloyd calculated its MCEV at €4.1bn at the end of June. Under Aviva’s more conservative accounting methods, Delta Lloyd had an MCEV of €2.7bn at the half-year, pricing the IPO at a slight premium.
“From Aviva’s point of view, it is probably less than they would like to have received for it, at less than embedded value, but at the same time it is a loss-making business,” said MF Global analyst Peter Eliot
The Delta IPO looks set to rank as the second-biggest in Europe this year after that of Polish utility PGE, which is expected to raise $2.1bn when it goes public on 6 November.