Just Retirement, the specialist life insurer, is itself retiring from stock market life.
The company has agreed to a 76p a share bid from Avalon Acquisitions, a vehicle backed by private equity group Permira. The deal values the company, which sells investment products to people approaching retirement, at £225.5m. Just Retirement's shares have added 5p to 74.5p.
Panmure Gordon described the move as a "sad end for investors" and suggested the bid was a low ball one. Analyst Barrie Cornes said:
After over a year in discussions, Just Retirement have finally announced a recommended offer for the company at 76p a share in cash. Although the deal will almost certainly go through, we view it as disappointing. The year end results announced today [operating profits up 25%] reinforce our view that the business is in good shape.
It would appear that majority shareholder, Langholm Capital, had simply decided to sell its stake and this was the catalyst for the sale process. In our view the company is being acquired at an extremely low price. The press release talks of 76p a share being a 57% premium to the closing price at 7
November 2008, but the world has moved on, making such comparatives irrelevant.Based on the current trading and these results, we would have increased our target price to a figure in excess of 76p but it is largely irrelevant now. A sad end for investors in our view.
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