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Saga sets offer price at a lowly 185p

Published: 03:04 23 May 2014 EDT

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Over-50s insurer and holidays group Saga (LON:SAGA) has set its offer price at the bottom of the already reduced range ahead of its IPO.

The shares have been priced at 185p, valuing the company at £2.1bn, compared with initial estimates of £2.5bn, and raising £550mln for Saga.

Investors were informed earlier in the week that the share sale was to be priced at between 185p and 205p, down from the original 185p-245p range.

It is thought the lower offer price was due to a lack of demand from institutional investors who normally take up a larger percentage of the shares on offer in big floats.

The company said 50% of the offer was allocated to retail investors, including a “substantial majority” to its customers, who were offered perks as an incentive to buy shares.

Customers were able to apply for between £1,000 and £9,250 worth of shares.

More than two-thirds of customers were allocated at least 50% of their application amount, Saga revealed.

Non-clients who applied for up to £10,000 of shares were given 400 shares each, worth just £740.

Conditional dealings begin today, while retail investors can start trading the shares on 29 May.

“We have been very pleased with the level of demand for Saga shares from both retail and institutional investors, with the offer subscribed several times over,” said executive chairman Andrew Goodsell.

“We are delighted to have so many of our customers as shareholders and to have a high quality group of core institutions who we believe will be long-term supporters of the business.”


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