(Recasts, adds background, comments)
By Freya Berry and Anjuli Davies
LONDON, April 23 British over-50s insurer Saga
is planning to announce its intention to float next week in a
London stock market debut that could value the company at 3
billion pounds ($5.1 billion), two sources familiar with the
matter said on Wednesday.
The share offer would be the UK's biggest insurance listing
for at least five years, and the largest European insurer to
list since Poland's PZU SA in 2010, according to
Thomson Reuters data.
Saga, which is owned by private equity firms Permira
, Charterhouse and CVC, would raise
at least 750 million pounds taking into account the London Stock
Exchange's requirement for a minimum free float of 25 percent,
one of the sources said.
Saga, which also offers cruises and a dating service, is
seeking a sizeable retail offering in what has been a bumper
year for London listings. It has sent out letters to its
approximately 2.5 million customers as it targets its own
customer base. Investors can also register for shares via its
"We are preparing ourselves for a potential IPO (initial
public offering)," Paul Green, director of communications at
Saga, said. "We have not yet declared any intention to float."
A growing number of British companies are seeking stock
market debuts this year. On Wednesday cake shop chain Patisserie
Valerie said it was planning a stock market listing, while
retailers Poundland and Pets at Home have
already made debuts in London.
Thomson Reuters data showed that last month London listings
reached their highest since the first quarter of 2007 as
companies cash in on strong equity markets.
The private equity firms acquired Saga along with the
Automobile Association in 2007. The consortium paid 6.3 billion
pounds for the two firms, which were then merged under Acromas,
a newly-formed parent holding company.
Saga's earnings before interest, tax, depreciation and
amortisation (EBITDA) were 233.7 million pounds in the financial
year to January 2014. Last month Saga undertook a 1.4 billion
pound refinancing of its debt to pave the way for a potential
The last major UK insurance company to float according to
Thomson Reuters data was Direct Line, which was valued
at 2.6 billion pounds after a 2012 listing. Direct Line is
currently trading at a price multiple of almost 10 times
Bank of America Merrill Lynch and Goldman Sachs
will lead the Saga deal, with Credit Suisse and
Citi as joint bookrunners, one of the sources said.
Permira and the banks declined to comment. CVC and
Charterhouse were not immediately available to comment.
($1 = 0.5944 British Pounds)
(Editing by Louise Heavens and Jane Merriman)