Insurance firm esure has set a price range of 240p to 310p per share ahead of its much-anticipated London initial public offering.
The mid-point values the company - founded and chaired by Peter Wood, one of Britain's wealthiest entrepreneurs - at £1.1bn.
The home and motor insurer said it would repay "all of esure's outstanding debt" with the £50m it hopes to raise from the sale of new shares.http://news.sky.com/story/1061865/esure-sets-price-range-ahead-of-flotation
There is talk that the starting price will be around the 270p mark, which if true puts it on a dividend yield of around 6% and prospective P/E of around 10, lower than its market peers. The last big insurance company to float was Direct Line, which also offered a yield of around 6%. There were doubts about Direct Line, but since the IPO the share price has been a steady riser, although the bull run recently should have helped it. Chances are Esure could also be a steady performer, at least while markets are good, and the prospective yield does look good for income seekers at a time of low IR's for savings on cash.
IPO's though seem to be back in fashion, as we also have estate agent Countrywide coming to market this week as well.
Britain's biggest estate agent, Countrywide, is poised to sell its shares in an initial public offering on Wednesday at the highest possible price it had planned for, in a further sign that the UK housing market is gaining momentum.
The company is preparing to offer its shares at the top end of the range – 330p to 350p a share, up from an initial 260p-350p – two unnamed sources told Reuters.http://www.guardian.co.uk/business/2013/mar/18/countrywide-flotation-optimism-housing-market
Not sure about that UK housing market momentum, but it's perhaps typical of an estate agent it wants the highest price possible at float, so not as attractive for income seekers as Esure.
