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Friday 08 March, 2013

esure Group plc

Initial Public Offering - Indicative Price Range

RNS Number : 5559Z
esure Group plc
08 March 2013
 



NOT FOR PUBLICATION, DISTRIBUTION OR RELEASE DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES OF AMERICA, CANADA, JAPAN OR AUSTRALIA

This announcement is an advertisement and not a prospectus and investors should not subscribe for or purchase any shares referred to in this announcement except on the basis of information in the prospectus (the "Prospectus") to be published by esure Group plc (the "Company" or "esure" and  together with its subsidiaries, the "Group") in connection with the offer of its ordinary shares (the "Shares") and the admission of its Shares to the premium listing segment of the Official List of the UK Listing Authority (the "Official List") and to trading on the main market for listed securities (the "Main Market") of the London Stock Exchange plc ("Admission") (the "IPO" or "Offer"). Copies of the Prospectus will, following publication, be available from esure's registered office.

 

This advertisement is not for distribution, directly or indirectly, in or into the United States of America (including its territories and possessions, any state of the United States of America and the District of Columbia) (the "United States"), Australia, Canada, Japan or other excluded territories. This advertisement does not constitute, or form part of, an offer to sell, or a solicitation of an offer to purchase, any securities in the United States, Australia, Canada, Japan or other excluded territories. The securities of esure have not been and will not be registered under the U.S. Securities Act of 1933 (the "Securities Act") and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The securities referred to herein have not been registered under the applicable securities laws of Australia, Canada or Japan and, subject to certain exceptions, may not be offered or sold within Australia, Canada or Japan or to any national, resident or citizen of Australia, Canada or Japan. The distribution of this advertisement in other jurisdictions may be restricted by law and persons into whose possession this advertisement comes should inform themselves about, and observe, such restrictions.

 

This announcement, which has been prepared by and is the sole responsibility of esure, has been approved by Deutsche Bank AG, London Branch ("Deutsche Bank") and J.P. Morgan Securities plc (which operates its investment banking business in the UK under the name J.P. Morgan Cazenove) solely for the purposes of section 21 of the Financial Services and Markets Act 2000 (as amended).

8 March 2013

esure Group plc

Initial Public Offering - Indicative Price Range

 

Following the announcement on 27 February 2013 of its intention to float, esure, the UK motor and home insurer founded by its Chairman, Peter Wood, the foremost general insurance entrepreneur in the UK, today announces the indicative price range for the proposed IPO of its Shares and its intention to publish, later today, its Prospectus.

·      The indicative price range for the Offer has been set at 240p to 310p per Share

·      The minimum number of Shares to be included in the Offer will be 145,505,161 Shares and the maximum number of Shares to be included in the Offer will be 210,216,667 Shares, including up to 20,833,334 new Shares to be issued by esure. The remaining Shares under the Offer will be sold by certain of esure's current shareholders, principally Peter Wood and Tosca Penta Investments LP, and members of management

·      The issue of new Shares is expected to raise £50 million in proceeds, which will be applied to repay all of esure's outstanding debt

·      The indicative number of Shares to be included in the Offer is estimated to represent between approximately 35% and 50% of esure's share capital on Admission

·      esure's expected market capitalisation at Admission would be approximately £1,149 million based on the mid-point of the indicative price range (assuming esure raises proceeds of £50 million through the issue of new Shares), which is expected to make esure eligible for inclusion in the FTSE 250 Index in due course

·      The Offer comprises an offer to institutional investors in the UK and other qualifying geographies and an intermediaries offer to facilitate the participation of retail investors in the UK, the Channel Islands and the Isle of Man

·      Institutional bookbuilding and applications under the intermediaries offer will commence today with the publication of the Prospectus

·      The announcement of final pricing for the Offer and the commencement of conditional dealings in the Shares on the London Stock Exchange are expected to occur on or around 22 March 2013

·      Admission is expected to occur and unconditional dealings in the Shares on the London Stock Exchange are expected to commence on or around 27 March 2013

Peter Wood, Chairman of esure Group plc said:

"We have worked hard for many years to make esure a business that can compete at the highest level with confidence. Today is a milestone reached through the enormous hard work by the esure board, executive team and staff. We live and breathe insurance at esure and look forward to bringing that knowledge, commitment and focus to bear as a premium listed company."

Offer overview

The Offer will comprise an offer to institutional investors in the UK and other qualifying geographies, and to intermediaries in the UK who will facilitate the participation of their retail clients in the UK, the Channel Islands and the Isle of Man (the "Intermediaries Offer").  The intermediaries appointed in connection with the Intermediaries Offer at the date of this announcement (the "Intermediaries") are set out in the notes to editors below.

The Group intends to apply for admission of its Shares to the premium listing segment of the Official List and to trading on the main market for listed securities of the London Stock Exchange plc (together, "Admission").

The indicative price range for the Offer has been set at 240p to 310p per Share. The minimum number of Shares to be included in the Offer will be 145,505,161 Shares and the maximum number of Shares to be included in the Offer will be 210,216,667 Shares. The Offer comprises the issue of new Shares by the Company, raising proceeds of approximately £50 million, and the sale of existing Shares by certain of esure's current shareholders, principally Peter Wood and Tosca Penta Investments LP, and members of management, as well as certain current and former employees of the Company (together, the "Selling Shareholders"). Shares (representing up to 15 per cent of the total number of Shares that are subject to the Offer) are also being made available pursuant to an over-allotment option. 

Based on the mid-point of the price range for the Offer and including the new Shares expected to be issued in the Offer, the expected market capitalisation of esure on Admission would be £1,149 million. This is expected to make esure eligible for inclusion in the FTSE 250 Index in due course.

The proceeds of the Offer received by the Company will be applied to remove all debt by repaying the Group's outstanding £50 million perpetual subordinated loan notes, which were issued by the Group to Tosca Penta Investments LP in 2010.

The IPO is intended to provide a stable corporate platform and long term ownership structure for the next phase of esure's development, to further enhance its profile and brand recognition, and to support the future recruitment, retention and incentivisation of senior management and employees.

esure is expected to have a free float of between approximately 35 per cent and 50 per cent on Admission. esure's Chairman, Peter Wood, will retain a significant shareholding and will remain esure's largest shareholder following completion of the Offer. Each of esure, the Selling Shareholders and the Directors of esure will agree to certain lock-up arrangements in respect of the issue or sale of the Shares. In particular, Peter Wood has entered into an extended lock-up arrangement whereby he has undertaken to the Company that, as of today, he will retain, for a period ending two years after Admission, Shares representing approximately two-thirds of his holding immediately following Admission (calculated before utilisation of the over-allotment option and assuming the mid-point of the price range and a free float of 42.5%).

The application period for the Intermediaries Offer will commence following publication of the Prospectus, expected later today. Completed application forms in respect of the Intermediaries Offer must be received by the Intermediaries by 5.00 pm on 19 March 2013. Indications of interest from interested institutional investors must be received by 5.00 pm on 21 March 2013.

It is expected that the price at which the Shares will be sold pursuant to the Offer will be announced at or around 7.00 am, and conditional dealings in the Shares will commence at or around 8.00 am, on 22 March 2013. Admission is expected to occur and unconditional dealings in the Shares are expected to commence on or around 27 March 2013.

Details of the Offer and the Prospectus will be available, in electronic form, following publication of the Prospectus at www.esuregroup.com, subject to certain restrictions.

Deutsche Bank is acting as Joint Global Co-ordinator and Joint Bookrunner, J.P. Morgan Cazenove is acting as Joint Global Co-ordinator, Joint Bookrunner and Sole Sponsor, and Canaccord Genuity Limited and Numis Securities Limited are acting as Co-Lead Managers.

esure Overview

esure Group plc is a UK-focused personal lines insurer founded in 2000 by Peter Wood, the foremost general insurance entrepreneur in the UK and the Group's Chairman. The Group also owns 50 per cent of top-four UK insurance price comparison website, Gocompare.com. The Group has established a strong platform for growth and a track record of profitability. The Group has achieved this against a backdrop of challenging market conditions through a disciplined and conservative approach to its motor underwriting business, the application of the same philosophy in growing its home underwriting business, and a strong focus on generating revenues from associated activities such as the sale of additional insurance products alongside its core motor and home insurance policies and, more recently, the development of its branded broker services. These associated activities offer higher returns on capital employed and another source of cash generation that, together with the home underwriting business, are part of a wider diversification strategy aimed at reducing the Group's exposure to the cyclicality of the motor insurance market.

Enquiries


esure Group plc                                                                Tel: 01737 641000

Adrian Webb, Head of Corporate Communications

 

Citigate Dewe Rogerson                                                  Tel: 020 7638 9571       

Chris Barrie, Andrew Hey, Grant Ringshaw

 

Deutsche Bank                                                                 Tel: 020 7545 8000

Tadhg Flood, Michael Lamb, Lorcan O'Shea

 

J.P. Morgan Cazenove                                                      Tel: 020 7742 4000

Conor Hillery, Piers Davison, James Taylor

 

Canaccord Genuity                                                           Tel: 020 7523 8350

Roger Lambert, Bruce Garrow
                                                                                         

Numis Securities                                                              Tel: 020 7260 1000
Oliver Hemsley, Charles Farquhar, Robert Bruce



NOTES TO EDITORS

 

Defined terms used in these notes to editors have the meanings given to such terms in the Prospectus expected to be published by esure later today.

1. Offer and Admission Statistics

 

Price Range (per Ordinary Share)(1)

 

240p to 310p

Number of Existing Ordinary Shares in issue immediately prior to Admission

 

399,600,000

       Minimum number of Ordinary Shares which may be comprised in the Offer(2)

 

145,505,161

       Maximum number of Ordinary Shares which may be comprised in the Offer(3)

 

210,216,667

Maximum number of Ordinary Shares in existence on Admission(4)

 

420,433,334

Indicative number of Ordinary Shares in the Offer as a percentage of total      number of Ordinary Shares in existence on Admission(5)

 

Between 35%

and 50%

Maximum number of Existing Ordinary Shares subject to the Over-allotment Arrangements (6)

 

31,532,500

Estimated proceeds of the Offer receivable by the Company(7)

 

£50 million

Estimated proceeds of the Offer receivable by the Selling Shareholders(8)

 

£438.3 million

Indicative market capitalisation of the Company at mid-point of the Price Range (9)

 

£1,148.9 million

Notes:

(1) It is currently expected that the Offer Price will be within the Price Range; however, this range is indicative only and may change during the course of the Offer. If the Price Range does change, the Company would not envisage making an announcement until determination of the Offer Price, unless required to do so by law or regulation. To the fullest extent permitted by law, applications received under the Institutional Offer and the Intermediaries Offer are irrevocable and are based on the amount the applicant wishes to invest and not the number of Ordinary Shares or the Offer Price. The Company expects to publish the Pricing Statement containing the Offer Price and the number of Ordinary Shares which are the subject of the Offer on or around 22 March 2013.

(2) Calculated on the basis that the Offer Price is set at the top of the Price Range and on the assumption that the total number of Ordinary Shares subject to the Offer represents 35 per cent of the total number of Ordinary Shares in issue immediately following Admission (calculated before utilisation of the Over-allotment Arrangements) and there is no exercise of the Overallotment Option.

(3) Calculated on the basis that the Offer Price is set at the bottom of the Price Range and on the assumption that the total number of Ordinary Shares subject to the Offer represents 50 per cent of the total number of Ordinary Shares in issue immediately following Admission (calculated before utilisation of the Over-allotment Arrangements) and there is no exercise of the Over-allotment Option.

(4) Assuming that the Offer Price is set at the bottom of the Price Range and that the Company issues sufficient New Ordinary Shares pursuant to the Offer to raise proceeds of £50 million.  

(5) It is currently expected that the Major Shareholders will, in aggregate, sell such number of their Existing Ordinary Shares as is necessary to ensure that the total number of Ordinary Shares subject to the Offer represent between 35 per cent and 50 per cent of the total number of Ordinary Shares in issue immediately following Admission (calculated before utilisation of the Over-allotment Arrangements); however, the Company does not know with certainty whether the Major Shareholders will do so and the number of Ordinary Shares subject to the Offer may represent a higher or lower percentage than that indicated (subject to meeting the free float requirements for Admission).

(6) Calculated on the basis that the total number of Ordinary Shares subject to the Offer represents 50 per cent of the total number of Ordinary Shares in issue immediately following Admission (calculated before utilisation of the Over-allotment Arrangements). In the event that fewer Ordinary Shares are subject to the Offer, the number of Existing Ordinary Shares subject to the Over-allotment Arrangements would correspondingly reduce to such number as represents a maximum of 15 per cent of the Ordinary Shares subject to the Offer.

(7) The estimated proceeds receivable by the Company are stated without the deduction of underwriting commissions and other estimated fees and expenses of approximately £7.0 million (inclusive of amounts in respect of VAT) payable by the Company and incurred in connection with Admission and the Offer, which the Company intends to fund from cash resources.

(8) The estimated proceeds receivable by the Selling Shareholders are stated on the basis that the total number of Ordinary Shares subject to the Offer represents 42.5 per cent of the total number of Ordinary Shares in issue immediately following Admission (calculated before utilisation of the Over-allotment Arrangements) and that the Offer Price is set at the mid-point of the Price Range. Proceeds are stated without the deduction of underwriting commissions and amounts in respect of stamp duty or SDRT payable by the Selling Shareholders in connection with the Offer, which are estimated to amount to up to £15.3 million.

(9) Assuming the Company issues New Ordinary Shares sufficient to raise proceeds of £50 million pursuant to the Offer. The market capitalisation of the Company at any given time will depend on the market price of the Ordinary Shares at that time.  There can be no assurance that the market price of an Ordinary Share will be equal to or exceed the Offer Price.                             

2. Expected Timetable of Principal Events

 


Time and Date (1)(2)

Latest time and date for receipt of completed application forms by the Intermediaries in respect of the Intermediaries Offer

5.00 p.m. 19 March 2013

 

Latest time and date for receipt of indications of interest from institutional investors in respect of the Institutional Offer

5.00 p.m. 21 March 2013

 

Announcement of the Offer Price through a Regulatory Information Service, publication of the Pricing Statement and notification of allocations of Ordinary Shares

7.00 a.m. 22 March 2013(3)

 

Commencement of conditional dealings in Ordinary Shares on the London Stock Exchange

8.00 a.m. 22 March 2013

Admission and commencement of unconditional dealings in Ordinary Shares on the London Stock Exchange

8.00 a.m. 27 March 2013

 

CREST accounts credited in respect of Ordinary Shares in uncertificated form

27 March 2013

Latest date for despatch of definitive share certificates (where applicable) for Ordinary Shares in certificated form

10 April 2013

 

Notes:

(1) Times and dates set out in the timetable above and mentioned throughout this announcement are indicative only and may be subject to change without further notice.

 

(2) All references to time in this timetable are to London time.

 

(3) The Offer Price and details of the final number of Ordinary Shares subject to the Offer will be announced via a Regulatory Information Service and set out in the Pricing Statement. The Pricing Statement will be available free of charge at the registered office of the Company at The Observatory, Castlefield Road, Reigate, Surrey RH2 0SG. In addition, the Pricing Statement will, subject to certain restrictions, be published in electronic form and be available on the Company's website at www.esuregroup.com.

 

It should be noted that, if Admission does not occur, all conditional dealings will be of no effect

and any such dealings will be at the sole risk of the parties concerned.

 

3. Firms acting as Intermediaries for the Offer

 

As at the date of this announcement, the following financial intermediaries have agreed to act as Intermediaries in connection with the Intermediaries Offer:

 

AJ Bell Securities Limited

      Jarvis Investment Management Ltd.

Barclays Stockbrokers Limited

      Killik & Co. LLP

Collins Stewart CI Limited

      Paul E. Schweder Miller & Co.

Collins Stewart Wealth Management Ltd.

      Redmayne-Bentley LLP

Charles Stanley & Co. Ltd

      SimplyStockbroking Limited

WH Ireland Ltd.

      Talos Securities Limited (trading as    

Hargreave Hale Limited

      Selftrade)

Hargreaves Lansdown Asset Management Ltd

      The Share Centre Limited

Interactive Investor Trading Ltd

      Walker Crips Stockbrokers Limited


The Company may invite additional financial intermediaries to agree to become Intermediaries for the purposes of the Intermediaries Offer.

 

Forward-looking Statements

This announcement contains "forward-looking" statements. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond esure's control and all of which are based on the directors' current beliefs and expectations about future events. Forward-looking statements are sometimes identified by the use of forward-looking terminology such as "believes", "expects", "may", "will", "could", "should", "shall", "risk", "intends", "estimates", "aims", "plans", "predicts", "projects", "anticipates", "continues", "assumes", "positioned" or "anticipates" or the negative thereof, other variations thereon or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. Forward-looking statements may and often do differ materially from actual results. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the directors or esure with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to esure's business concerning, amongst other things, the results of operations, financial condition, liquidity, prospects, growth and strategies of esure and the industry in which it operates. These forward-looking statements and other statements contained in this announcement regarding matters that are not historical facts involve predictions. No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing esure. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed or implied in such forward-looking statements. The forward-looking statements contained in this announcement speak only as of the date of this announcement. esure disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this announcement to reflect any change in its expectations or any change in events, conditions or circumstances on which such statements are based unless required to do so by applicable law, the Prospectus Rules, the Listing Rules or the Disclosure and Transparency Rules of the Financial Services Authority.

*                      *                     *

Neither this announcement nor any copy of it may be made or transmitted into the United States, or distributed, directly or indirectly, in the United States. Neither this announcement nor any copy of it may be taken or transmitted into Australia, Canada or Japan or to any persons in any of those jurisdictions, except in compliance with applicable securities laws. Any failure to comply with this restriction may constitute a violation of United States, Australian, Canadian or Japanese securities laws. The distribution of this announcement in other jurisdictions may be restricted by law and persons into whose possession this announcement comes should inform themselves about, and observe, any such restrictions. The securities referred to herein have not been registered under the applicable securities laws of the United States, Canada, Australia or Japan and, subject to certain exceptions, may not be offered or sold within the United States, Canada, Australia or Japan or to any national, resident or citizen of the United States, Canada, Australia or Japan.

In particular, this announcement and the information contained herein are not for distribution (directly or indirectly) in or into the United States or other excluded territories. This announcement does not constitute, or form part of, an offer to sell, or a solicitation of an offer to purchase, any securities in the United States, Australia, Canada or Japan or in any jurisdiction to whom or in which such offer or solicitation is unlawful.

The securities of esure have not been and will not be registered under the Securities Act and may not be offered or sold within the United States absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Subject to certain exceptions, the shares referred to herein may not be offered or sold in Australia, Canada or Japan or to, or for the account or benefit of, any national, resident or citizen of Australia, Canada or Japan.

*                      *                     *

The information in this announcement is for background purposes only and does not purport to be full or complete. No reliance may be placed for any purpose on the information contained in this announcement or its accuracy or completeness. This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any Shares or any other securities nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, any contract therefor.

This announcement does not constitute a recommendation concerning the Offer. The price and value of securities can go down as well as up. Past performance is not a guide to future performance. Information in this announcement or any of the documents relating to the Offer cannot be relied upon as a guide to future performance. There is no guarantee that Admission will occur and you should not base your financial decisions on esure's intentions in relation to Admission at this stage. Potential investors should consult a professional advisor as to the suitability of the Offer for the entity concerned.

Deutsche Bank, J.P. Morgan Cazenove, Canaccord Genuity and Numis Securities (together, the "Underwriters"), all of which are authorised and regulated in the United Kingdom by the Financial Services Authority, are acting exclusively for esure and no-one else in connection with the Offer. They will not regard any other person as their respective clients in relation to the Offer and will not be responsible to anyone other than esure for providing the protections afforded to their respective clients, nor for providing advice in relation to the Offer, the contents of this announcement or any transaction, arrangement or other matter referred to herein.

In connection with the Offer, each of Deutsche Bank, J.P. Morgan Cazenove, Canaccord Genuity and Numis Securities and any of their respective affiliates, acting as investors for its or their own accounts, may subscribe for or purchase Shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for its or their own accounts in such Shares and other securities of esure or related investments in connection with the Offer or otherwise. Accordingly, references in the Prospectus, once published, to the Shares being issued, offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue or offer to, or subscription, acquisition, placing or dealing by, the Underwriters or any of their respective affiliates acting as investors for their own accounts. The Underwriters do not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligations to do so. In addition, in connection with the Offer, certain of the Underwriters may enter into financing arrangements with investors, such as share swap arrangements or lending arrangements where Ordinary Shares are used as collateral, that could result in such Underwriters acquiring shareholdings in the Company.

None of Deutsche Bank, J.P. Morgan Cazenove, Canaccord Genuity or Numis Securities or any of their respective affiliates or any of their respective directors, officers, employees, advisers or agents accepts any responsibility or liability whatsoever for, or makes any representation or warranty, express or implied, as to the truth, accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to esure, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available, or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

In connection with the Offer, J.P. Morgan Cazenove, as stabilising manager, or any of its agents, may (but will be under no obligation to), to the extent permitted by applicable law, over-allot Shares or effect other transactions with a view to supporting the market price of the shares at a higher level than that which might otherwise prevail in the open market. J.P. Morgan Cazenove will not be required to enter into such transactions and such transactions may be effected on any stock market, over-the-counter market, stock exchange or otherwise and may be undertaken at any time during the period commencing on the date of the commencement of conditional dealings of the Shares on the London Stock Exchange and ending no later than 30 calendar days thereafter. However, there will be no obligation on J.P. Morgan Cazenove or any of its agents to effect stabilising transactions and there is no assurance that stabilising transactions will be undertaken. Such stabilising measures, if commenced, may be discontinued at any time without prior notice. In no event will measures be taken to stabilise the market price of the Shares above the offer price. Save as required by law or regulation, neither J.P. Morgan Cazenove nor any of its agents intends to disclose the extent of any over-allotments made and/or stabilisation transactions conducted in relation to the Offer.

*                      *                      *

Certain figures contained in this announcement, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this document may not conform exactly with the total figure given.

*                      *                      *

The number of Shares to be made available by the Selling Shareholders pursuant to the Offer is indicative only and the selling indications of certain shareholders described in this announcement are non-binding. Although the maximum number of Shares that are subject to the Offer cannot be increased, it can decrease (including, in theory, to such number as would, when added with the number of new Shares made available by the Company pursuant to the Offer, still allow the Company to meet the minimum free float requirements of the UK Listing Authority).


This information is provided by RNS
The company news service from the London Stock Exchange
 
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