Axa continues UK sell-off with Phoenix deal –

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Pearl Life will gain £12.3bn of assets under management and more than 910,000 policies from the deal with Axa, which manages more than €1 trillion.

The Phoenix subsidiary, which was advised by bankers at HSBC and JP Morgan, will fund the acquisition by floating 22.5m new shares, representing almost 10pc of its current issued share capital. It will also take on short-term debt, which it expects to repay within six months of the deal completing.

Despite the rights issue, Phoenix’s share price increased by 3.3pc on the deal’s announcement, indicating that investors welcome with the plan.

That is partly because the deal will allow Phoenix to hike its dividend by 5pc to 28p for 2016. As well as boosting the company’s cash flow, the purchase of the Axa business shows regulators that Phoenix is becoming more diversified, which in turn reduces regulatory capital demands and increases the funds available to pay out to investors.

Axa continues UK sell-off with Phoenix deal –