Bloomberg News

Partnership Assurance Prices IPO at 385 Pence Per Share

June 07, 2013

Cinven Partners LLP, a London-based private-equity firm, said it will reap seven times its investment in U.K. annuity provider Partnership Assurance Group Plc (PA/)’s initial public offering.

The stock sale will give Partnership a market value of 1.54 billion pounds ($2.4 billion), making it eligible for inclusion in the FTSE 250 Index, the company said in a statement today. Cinven sold about 300 million pounds of shares in the IPO and will keep a 52 percent stake valued at 800 million pounds.

Partnership shares rose almost 25 percent on their first day of trading and were up 18.4 percent to 456 pence at 12:58 p.m. in London. IPOs in Europe, the Middle East and Africa have raised $7.3 billion this year, about 66 percent more than the same period in 2012, according to data compiled by Bloomberg.

Partnership’s planned trading date was moved to today rather than June 12, terms obtained by Bloomberg News show. The IPO was subscribed multiple times, people familiar said yesterday.

Significant investors include Blackrock Investment Management U.K. Ltd. and the Government of Singapore Investment Corp., according to an IPO statement.

2008 Acquisition

Cinven bought Partnership for 158 million pounds in August 2008 from London-based Phoenix Equity Partners, financing the investment entirely with equity from its fund. It’s taking the insurer public after motor insurer Esure Group Plc (ESUR) raised 604 million pounds in an IPO in March and Royal Bank of Scotland Group Plc raised about 1.3 billion pounds by selling stakes in Direct Line Group Plc, Britain’s biggest home and motor insurer.

“Partnership has been a strong investment for Cinven,” Peter Catterall, a partner at Cinven, said in an e-mailed statement. “Cinven will remain a significant shareholder in Partnership in order to continue participating in its future growth.”

Annuities combine elements of investment and insurance products by offering guaranteed annual payouts to retirees. The company’s operating profit rose 42 percent to 112 million pounds in 2012.

Partnership Assurance sold 32.5 million new shares for 385 pence each in the offering to raise about 125 million pounds to pay down debt. The insurer’s owners sold 94 million shares, and Cinven may sell 19 million more shares through the overallotment option. The shares were initially offered for between 325 pence and 400 pence, according to terms.

Morgan Stanley (MS:US) and Bank of America (BAC:US) Corp. managed the IPO.

To contact the reporter on this story: Kiel Porter in London at kporter17@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net


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