Phoenix on the rise after £3bn insurance buyout
SERIAL business-buyer Phoenix Group was the talk of the trading floor yesterday after completing a £3.2bn deal for Standard Life Aberdeen’s (SLA) insurance business. As part of the agreement SLA will get £2.3bn in cash and a 19.9pc stake in Phoenix.
Over the years, Phoenix has built a business hoovering up closed life books, known as ‘zombie funds’.
The SLA deal means Phoenix will almost double the number of policyholders on its books to 10.4 million, while it will receive an extra £158bn in assets.
It also marks the end of a 193year association with the insurance industry for SLA, which was formed last year through the merger of Standard Life and Aberdeen Asset Management.
Martin Gilbert, co-chief executive of SLA, said: ‘ Today’s announcement represents a logical next step in Standard Life Aberdeen’s journey to build a world-class investment company, positioning us strongly for the future and enabling us to meet the evolving needs of our customers and clients.’ Phoenix’s shares finished up 7.3pc, or 55.5p, at 815p. However, Standard Life Aberdeen’s price was down 2.5pc, or 9.6p, to 376.1p.
Just to confuse everyone, the similarly-named Phoenix Asset Management rode to the rescue of troubled stamp collector favourite Stanley Gibbons in a £19.5m deal yesterday.
Fund manager Phoenix, which owns three-quarters of toy maker Hornby, has bought a 58pc stake in the firm and has agreed to write off £7m of debt.
It will also give the stamp firm £5.4m of working capital for its day-to-day operations and to buy new stock. Jersey-based Stanley Gibbons, founded in 1856, had been struggling under the weight of its debts and there were fears for the future of the company. But the Phoenix deal has calmed investors’ nerves and shares shot up 10.3pc, or 0.5p, to 5.35p yesterday.
Meanwhile, the FTSE 100 finished down for the second day in a row, falling 0.1pc or 7.98 points to 7244.41. The FTSE 250 fared better, ending the day up 0.3pc, or 64.99 points at 19801.05.
Shares in Welsh chipmaker IQE, whose technology is used in Apple’s iPhone, continued their recovery after hedge funds accused the firm of deceiving investors earlier this month.
Not one for shirking a skirmish, plucky US investment firm Muddy Waters Capital branded the Cardiffbased firm an ‘ egregious accounting manipulator’.
Muddy Waters claimed CSC, a joint venture between IQE and Cardiff University, was nothing more than an ‘alter ego’ of the Welsh firm and did not have any customers – well, apart from IQE itself.
It argued IQE, which of course has refuted the claims, was misleading its investors.
Drew Nelson, chief executive of IQE, told this column that Thursday’s announcement of a new tie up between CSC and tech firm ICS to create components for high-speed broadband was proof that Muddy Waters had been talking a load of old tosh. Investors sided with IQE: at closing yesterday IQE’s share price was up 12.5pc, or 15.5p, to 139p.
Shares in Rightmove inched higher after the firm released a set of stonking results.
Its revenue jumped 11pc in 2017 while profits were up 10pc as the firm managed to persuade a record number of estate agents to list their properties on its site. It now advertises more than 1m properties, the firm said.
Shares hopped yesterday 4pc, or 172p, to 4482p.
However, rival On The Market struggled yesterday, despite announcing Chancellors Group of Estate Agents had started advertising properties on its website. Shares were down 2.7pc, or 4.5p, to 162p.