Partnership Assurance Group and Just Retirement Group, who have proposed a £1.6bn merger, are raising £150m through two share placings to help meet the costs of the merger.
Partnership stated it will issue around just under 40m new ordinary shares of 10 pence each representing almost 10 per cent of the company’s ordinary share capital, while Just Retirement left the size and pricing of its placing and open offer to be determined following an accelerated bookbuilding process.
A statement by Just Retirement on the stock exchange said: “It is intended that the two equity capital raisings will raise in aggregate net proceeds of approximately £150m, which is consistent with the intention which was announced by Just Retirement in the announcement of its proposed merger with Partnership Assurance released on 11 August 2015.”
Just Retirement’s placing will be run by Barclays Bank, Deutsche Bank and Nomura International, while Partnership’s issue is being run by JPMorgan Cazenove and Morgan Stanley.
The deal is expected to cover expected non-recurring integration costs of approximately £60m and transaction costs of approximately £20m, providing further comfort over the transition to Solvency II, along with supporting future growth initiatives and product development.
Partnership’s private equity backer Cinven Funds, which hold approximately 51.9 per cent of the group, is supportive of the placing and intend to participate. The statement added that the placing is not conditional on the completion of the merger or the Just Retirement offer.
The two firm’s respective boards announced they had reached agreement on the terms of a recommended all-share merger to create JRP Group on 11 August.
Under the terms of the deal, Partnership shareholders will be entitled to receive 0.834 new Just Retirement shares for each Partnership share held. It is expected to result in a 60/40 split in shareholding between Just Retirement and Partnership shareholders respectively.
peter.walker@ft.com
