Benfield float aims to raise £100m

Benfield, the world's third-largest reinsurance broker, yesterday confirmed plans to launch the largest initial public offering in the past 10 months, saying it would list on the London Stock Exchange in three weeks' time with a market capitalisation of up to £660m.

The listing will be the most significant since GUS partially floated Burberry, the Brit-chic fashion house, last July, valuing the whole business at £1.2bn.

The mood among other companies considering a flotation has been distinctly more timid and a series of companies such as Yell and Focus Wickes have pulled their share issues due to adverse market conditions.

Benfield, which has benefited from the surge in reinsurance rates in the past two years, said it aimed to raise £100m through the float, issuing shares within an indicative price range of 200p-260p. This would value the company at between £500m-£660m.

Benfield, currently based in Bermuda, last year called off takeover talks with US-based Marsh & McLennan, the world's largest insurance broker, in favour of a stock market listing. It changed its mind from listing in New York to London instead due to concerns that America's Sarbanes-Oxley Act would create too onerous a regulatory environment.

Grahame Chilton, chief executive of Benfield, said the float was "the next stage in the development of Benfield". The move will make a multi-millionaire out of Mr Chilton, who owns a 12.4 per cent stake in Benfield.

Other shareholders set for paper windfalls include co-founder Mike Rees, who also holds 12.4 per cent, and the chairman John Coldman, with 9 per cent.

Mr Chilton, who yesterday began a three-week roadshow to persuade institutions to take up the new shares, joined Benfield Lovick & Rees in 1982.

He gained his shares when he led a management buyout of the company with Matthew Harding, who helped to build Benfield up and was also vice-chairman of Chelsea football club. Mr Harding died in a helicopter crash six years ago.

Merrill Lynch and Morgan Stanley are acting as joint book runners and advisers on Benfield's offering. The cash raised will be used to reduce debt, Benfield said.

Benfield reported a £10.4m profit for the previous 12 months, compared with a £35.8m loss in 2001.