Aviva to offer shares in Dutch arm at a discount
INSURER Aviva is to offer shares in its Dutch subsidiary Delta Lloyd at a discount, sources familiar with the matter said yesterday, giving the unit a market value of about £2.7bn.
The group, which aims to list 30 to 40 percent of Delta Lloyd, is likely to receive 1bn euros (£913m) to 1.3bn euros from the initial public offering (IPO), the sources said. The market debut is expected on November 2.
“There are a lot of other offerings. Delta Lloyd is competing with some large rights issues. It needs to have a discount,” said one source.
The offering will be at around 0.7 to 0.75 times the market consistent embedded value (MCEV) of the Dutch unit, the sources said, referring to a measure of the value of an insurance portfolio commonly used in the industry.
Delta Lloyd’s MCEV, which measures the value of the shareholders’ interest in the in-force portfolios using market prices, stood at 4.1bn euros as of June 30.
Based on those values, Aviva will need to sell closer to 40 percent of the unit to raise the targeted money.
Aviva is to announce Delta Lloyd’s price range today, commencing a two-week bookbuilding process, handled by bookrunners Bank of America Merrill Lynch, Goldman Sachs, JP Morgan and RBS.
Aviva recently announced it will have a New York listing.