Saga has revealed that 700,000 customers have registered to take part in its stock market listing as it aims to raise around £550 million.
The over-fifties group is expected to float with a valuation of about £2.2 billion. It will join the London Stock Exchange as a “specialised consumer business” despite calls from some City investors that it should be categorised as an insurer.
So far, the number of customers registering interest in buying Saga shares is the same as the amount of applications Royal Mail received from the general public before its flotation. The company said retail investors would have to apply for at least £1000 of shares to be eligible for the share offer.
Andrew Goodsell, executive chairman, said: “What began 60 years ago in a small hotel in Folkestone is today one of Britain’s most trusted and respected companies. Our customers are at the heart of our brand and I am delighted they will have an opportunity to be shareholders in the company.”
Saga is owned by private equity firms Permira, Charterhouse and CVC, who paid £6.3 billion to buy both the group and the AA in 2007 and subsequently merged the two under Acromas, a newly formed parent holding company. It has 2.1 million customers and a database on 10.4 million people or 8.4 million households around the country.
Goodsell defended FTSE’s decision to classify the group as consumer business rather than an insurer, pointing to the fact that about 60% of its revenues came from travel and healthcare services and 40% from financial services.
However, critics said a more detailed breakdown — expected in its prospectus — will show insurance is the single largest revenue contributor. The group’s valuation might have been lower as an insurer because the sector is under pressure.