Lombard Insurance price disappoints

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NERVOUS institutional investors have forced Lombard Insurance to accept a disappointing flotation price, costing its senior managers hundreds of thousands of pounds, writes Paul Durman.

Andrew Laing, Lombard's managing director, and his colleagues had hoped to share in a 10 per cent stake in a company worth up to pounds 70m. But the low price of 160p a share achieved in Lombard's placing caused management to receive a reduced allocation of shares.

Mr Laing said management would own about 5 or 6 per cent. The issue price values Lombard at pounds 57m. He owns nearly 1.2 per cent, worth about pounds 666,000.

Mr Laing said that while 160p was 'obviously disappointing', it was a good premium to net asset value of 146p a share. He said Lombard had suffered because of nervousness towards the stock market in general and towards insurance companies and new issues in particular.

He said postponing the flotation was never an issue.