UPDATE 1-Just Retirement to offer at least 40 pct in November IPO

Thu Oct 17, 2013 6:59am EDT

By Chris Vellacott

LONDON Oct 17 (Reuters) - British insurer Just Retirement, a provider of pensions to unhealthy retirees including heavy smokers, is seeking a London listing as its private equity owners look to reduce their holdings.

Speaking to Reuters on Thursday after the company announced plans for an initial public offering, Chief Executive Rodney Cook said "at least 40 percent" of the company will be offered to investors.

The sale will comprise an offer of new shares to raise around 300 million pounds ($480 million) for the company, while private equity owner Permira and members of its management team will also be selling some of their stakes.

Cook said Permira will still remain "a very major shareholder" after the IPO.

The company did not say what valuation it was seeking, or specify what share of market capitalisation would be accounted for by the new shares.

However, Cook said Just Retirement aimed to become a member of Britain's mid-cap FTSE 250 index, and that an estimated market capitalisation of approximately 1.5 billion pounds "wouldn't be completely wrong".

Just Retirement's core business is to offer annuities to retirees with serious health conditions such as heart disease or heavy smokers. Because they are unlikely to live as long as their healthier counterparts, these so-called lifestyle and medically enhanced annuities pay out a higher income than more conventional products.

The company is also a provider of 'lifetime mortgage' products, used by pensioners to supplement retirement income by unlocking some of the value of their homes.

Just Retirement's IPO follows a flotation by its private-equity-backed rival Partnership Assurance in June.

A banking source close to the deal said the company will be seeking most of its new investors for the IPO in London, though management will be visiting institutions elsewhere in Europe and the United States.

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