Shares in over-50s insurer and travel operator Saga (SAGA) have soared over 34% to 18.3p after it said it is planning to raise £150 million in an equity raising.
Saga said the raising would strengthen its balance sheet, improve liquidity and support the execution of its ‘reinvigorated strategy under its strengthened management team’, which it hopes will return the company to sustainable growth and the ‘restoration of significant shareholder value’.
FORMER BOSS MAKES COMEBACK
A large portion of the money will include a strategic investment by former chief executive and owner Sir Roger De Haan, who’s planning to invest up to £100 million in the raising, including £60.6 million at 27p per share, representing a 98% premium to the shares’ closing price on Friday.
Saga will seek to raise the remaining £50 million from existing shareholders, for which the issue price would be a maximum of 15p per share.
Saga, which noted there had been recent media speculation of a raising, said it would be launched on or around 10 September.
Its statement comes after Sky News reported on Saturday that de Haan, who sold Saga for £1.3 billion in 2004, was set to inject up to £100 million into the company in return for a stake of close to 20%.
De Haan will replace Patrick O’Sullivan as the company’s non-executive chairman, while Euan Sutherland will remain as chief executive.
SAGA REJECTS US OFFERS
Saga also said in its statement that in deciding to proceed with the fundraising, its board of directors had considered ‘a number of options’ and recently rejected an unsolicited and highly conditional 33p per share takeover bid from a consortium of two US private equity firms.
It added that the 33p offer followed several earlier indicative approaches from the consortium at a significantly lower valuation. The investors have since confirmed they’re no longer considering an offer for the business.
