Swiss Re has said that ReAssure, its UK closed life book consolidator business, will be valued at up to £3.3 billion in its initial public offering (IPO) on the London Stock Exchange next month.
The reinsurer has set a price range of £2.80 to £3.30 per share, implying a market capitalisation for ReAssure of between £2.8 billion and £3.3 billion.
Swiss Re confirmed earlier this month that the long-awaited ReAssure IPO would go ahead in July, having originally indicated as early as August 2018 that it was considering such a transaction.
The offer is expected to deliver a free float of 26% of ReAssure’s issued share capital, and Swiss Re is also making available shares representing up to 15% of the offer as part of an over-allotment arrangement.
ReAssure is focused exclusively on the acquisition and management of closed books of life insurance policies, seeking to consolidate multiple books into one portfolio and generate efficiencies through better management and by leveraging the strength of Swiss Re’s overall group-wide capacity.
An IPO of ReAssure’s shares provides a route to bring fresh capital into the business, providing working capital to put into new transactions and grow the UK life insurance book under the brand.
Swiss Re also explained last week that the IPO would also facilitate increased flexibility and growth for the group, and indicated that it was eyeing further consolidation of closed life and pension books in the UK.