Market conditions blamed as £3.3bn London IPO suspended

2 weeks ago
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Reinsurance giant Swiss Re has suspended plans for a £3.3bn London stock market flotation of its subsidiary ReAssure, blaming “heightened caution” among investors.

The Zurich-based group had initially planned a market debut for the British life insurance business on Thursday but said it has now shelved this citing “market conditions”.

An initial public offering (IPO) would have cut Swiss Re’s stake in ReAssure from 75% to below 25%.

It had set a price range of £2.80 to £3.30 for ReAssure – Britain’s sixth-largest life insurer – valuing it at up to £3.3bn.

But reports overnight suggested there were doubts about the float amid a tough market for IPOs with some recent listings having performed poorly.

Swiss Re confirmed on Thursday that it was suspending the plans.

It said: “This action is in response to the heightened caution and weaker underlying demand in the UK primary market from large institutional investors.”

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A spokeswoman said the group was not currently considering restarting the process this year, though long-term options remained open.

Chief financial officer John Dacey said: “While we firmly believe that the long-term interests of ReAssure are best served by a more diverse 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.”

Bank of England governor Mark Carney said in a speech last week that markets had undergone a “sea change” in recent months reflecting growing concerns over trade and uncertainty over how central banks would respond.

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