Esure Holdings Ltd. (LON:ESUR) expected to enter into the FTSE 250 with £1.2bn market cap.
Having previously indicated a range between 240p and 310p, esure (LSE: ESUR) has today confirmed that its shares will be sold in its initial public offering at 290p per share.
The 290p set price comes after a 'bookbuilding' process among institutional investors and the submission of private-investor applications from retail stock brokers. Ordinary trading in the shares for private investors is expected to commence on or around 27 March.
191,179,310 existing and 17,241,380 newly issued shares sold at this price point equates to an implied market cap of £1.21bn, which is expected to make the insurer eligible for inclusion in the FTSE 250. However, only £50m in new money will be raised from the sale of newly issued shares to repay debt -- the remainder of the shares are being sold by existing holders, such as chairman Peter Wood and Tosca Penta Investments, and are expected to fetch up to around £554m.
Following today's announcement, Wood commented:
"Today's pricing is a ringing endorsement of esure's strengths and future prospects and we welcome all of our new shareholders, both institutional and retail, as co-investors in the next exciting phase of our development. As a premium listed company, esure will have the right corporate platform for development, and it is our task to maximise the opportunities that we see ahead of us for the mutual benefit of all our shareholders."
Wood established esure during 2000 and led a management buy-out during 2010. His previous ventures include Direct Line, on which he reportedly made £65m after selling it to Royal Bank of Scotland during the 1990s. Wood remains esure's largest shareholder with a stake of about 30.9%.
Of course, only you can decide whether today's indicative price range, Mr Wood's industry success and the wider prospects for the insurance sector will all combine to make esure an attractive investment.
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> Sam does not own any share mentioned in this article.
