Hard-hit annuity providers Just Retirement and Partnership Assurance to create £1.6bn group
Two specialist insurers caught up in George Osborne’s shake-up of the annuity market in last year’s budget have announced a merger plan to create a £1.6bn group.
Just Retirement and Partnership Assurance, both involved in the annuities market, lost half their market capitalisation last year when the chancellor changed the rules to give retirees greater flexibility over pensions. The new rules, which came into force in the spring, give people more autonomy over their retirement savings.
Steve Groves, chief executive of Partnership, is leaving as part of the deal because the top job is going to Just Retirement’s Rodney Cook. Just Retirement shareholders will own 60% of the combined company. Groves is expected to sell his £20m-plus shareholding.
The deal was brokered by the groups’ private equity backers, Permira and Cinven. Both backers have had a disappointing experience since floating the groups in the IPO boom of 2013. Partnership, for example, issued new shares at 385p. On Tuesday, they jumped 8% to168p. Shares in Just Retirement rose 1.6% to 202p.
The insurers, which were presenting to analysts at Deutsche on Tuesday, say they will raise £150m from the issue of new shares, to give the combined company a market capitalisation of £1.6bn. Advisers say there are savings of about £40m from duplication. The private equity shareholders are tied in for 90 days.
No comments:
Post a Comment