Financial News

  • 14 March 2014, 1:50

Goldman Poised To Spearhead 3bn Saga Listing

The owners of Saga, the financial services giant, are lining up Goldman Sachs to lead a bumper 3bn flotation that will involve one of London's largest retail share offerings for years.

Sky News understands that Acromas Holdings, Saga's parent company, is close to hiring Goldman and at least three other banks to work on an initial public offering (IPO).

The launch of the 3bn float, which would put Saga on course for inclusion in the FTSE-100 index, could come as soon as May, when Lance Batchelor, the former boss of Domino's Pizza, takes over as chief executive.

Goldman and Bank of America Merrill Lynch (BAML) are being lined up to act as global co-ordinators - the top roles - for Saga's IPO, with banks including Citi and Credit Suisse expected to be handed other positions, according to insiders.

The appointments have not yet been finalised and could still change in the coming days, sources close to the process cautioned.

BAML has already been hired to promote awareness of the offer among Saga's 2.7m customers, who are likely to receive free shares.

As much as half of the shares on offer, equating to hundreds of millions of pounds, could be sold to ordinary retail investors, meaning Saga is likely to vie with Royal Mail's privatisations for the status of the City's biggest retail offering for years.

A sale of part of the Government's remaining stake in Lloyds Banking Group, expected this year, will include a retail offering that will dwarf those of Saga and Royal Mail.

The City has speculated for months that Saga and the AA, the roadside recovery service that is its sister company, would go their separate ways more than six years after they were united in one of the UK's biggest private equity deals.

Charterhouse, CVC Capital Partners and Permira, the buyout firms which own the bulk of Acromas.

The listing would be likely to raise funds to pay down the company's debts.

Saga was founded in 1959 and its brand has become synonymous with products tailored to the so-called grey market. Last year it launched a fixed-price legal service for will writing, Power of Attorney, probate, and conveyancing for those moving home.

A flotation has been made possible by a refinancing of the 7bn debt mountain earlier this year which involved securitising the AA's future membership revenues.

The AA could be sold or floated separately, although an IPO of the company could be complicated by competition from Carlyle, another private equity group, which may seek to float the RAC as soon as this year.

Acromas declined to comment.

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