Saga’s upcoming floatation expected to be more popular than that of Royal Mail
Saga's planned stock market float is expected to prove more popular than the part-privatization of the Royal Mail as one in every three of the group's more than two million customers have expressed interest in buying shares.
Saga, whose business spans insurance, holidays as well as home healthcare, has plans to float on stock market before the end of May to raise estimated £550 million. The group is giving priority to its customers and employees in the rush to buy share during floatation that is expected to value the group at £3 billion.
Andrew Goodsell, executive chairman of Saga, said, "Our customers are at the heart of our brand and I'm delighted that they will have an opportunity to become shareholders and to be part of the next stage of our journey."
More than 700,000 of Saga's 2.1 million customers have already expressed their interest in buying shares even as the group has declared that customers must sign up for a minimum £1,000 of stock to be eligible, while employees can apply for a minimum of £500 worth of stock.
The situation suggests that Saga could face a demand for £710 million worth of stock, considerably up from £550 million that it plans to float. In case demand for shares exceeds supply, customers and employees will be able to get less than they would apply for because a considerable fraction of the stock will be reserved for ordinary investors and financial institutions.
The Royal Mail's floatation was severely condemned over the big amount of shares earmarked for City financial institutions that they sold for a quick profit, while small investors missed out the opportunity.