Insurance giant ReAssure pulls £3.3bn listing over weak demand
The British life insurance firm had expected to join the stock market on Thursday, but institutional investors baulked at the high price.
Life insurance business ReAssure failed to live up to its name on Thursday as bosses pulled a highly lucrative stock market listing due to lack of interest.
Parent company Swiss Re said it would scrap plans to start trading shares in ReAssure after it became apparent the valuation of up to £3.3 billion was too high.
Shares had been set at a range of 280p to 330p but Swiss Re’s finance chief John Dacey said: “While we firmly believe that the long-term interests of ReAssure are best served by a more diversified shareholder base, there has been no pressing need for Swiss Re to divest shares at a price that we consider to be unrepresentative of ReAssure’s value and future prospects.”
This action is in response to the heightened caution and weaker underlying demand in the UK primary market from large institutional investors ReAssure
The biggest sticking point appears to be caution from institutional investors, who have been burnt previously by new companies listing and subsequently watching shares plummet.
Swiss Re explained: “This action is in response to the heightened caution and weaker underlying demand in the UK primary market from large institutional investors.”
James Bond’s favourite car maker Aston Martin was the biggest new listing of 2018, but shares have collapsed from 1,900p to just 965p on Thursday.
Although there have been some successes, with brokerage business AJ Bell listing last December at 160p a share. Shares are now at 410.5p.
Swiss Re’s ReAssure specialises in buying up life insurance policies that other insurers no longer want. It manages 3.3 million policies and £40 billion of assets.
The plans would have seen Swiss Re sell down its 75% stake in ReAssure to less than 25%.
Mr Dacey added: “We retain our objective to reduce Swiss Re’s ownership in order to de-consolidate ReAssure. In the meantime, Swiss Re… remain fully committed and supportive of ReAssure and its management team, and will participate in future acquisitions in line with their respective shareholdings.”
A spokeswoman added that there were no plans to restart the listing process, known as an Initial Public Offering (IPO), this year, but did not rule out one in the future.