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HomeFT SelectInvestors value Athene at $7.4bn in IPO

Investors value Athene at $7.4bn in IPO

Investors have valued Athene at about $7.4bn in a stock market launch of the US pensions provider, according to people familiar with the matter.

Selling shareholders led by private equity house Apollo Global Management are set to raise $1.08bn as bankers handling the float prepare to price shares in the company at $40 apiece, the people said. That is the middle of a range of between $38 and $42.

Athene is on track to become the third biggest stock market launch of a US company this year, according to data from Dealogic. The sale of the stake is not due to raise any additional funds for the company itself. All the proceeds are set to go to its shareholders.

It shows listings are still being completed in a year that is on track to be the quietest for IPOs since 2003, according to the Dealogic data.

The listing price values Athene at a slight premium of about 5 per cent to its book value, making it more expensive than several peers in the life insurance sector. The S&P 500 life and health insurance index trades at slightly less than book value, about 96 per cent.

However, investors who took up the offer have bought into a fast-growing company that has become the seventh-biggest fixed annuity provider in the US in less than a decade, according to Limra Secure Retirement Institute.

Athene began operating in 2009 to capitalise on problems in the annuity market following the financial crisis.

The sector has come under pressure as ultra-low interest rates have made it harder for companies to generate adequate returns on the investments made to cover their commitments. Several insurers have quit the annuity business.

Athene, whose funds are managed by Apollo, has made a series of acquisitions as other operators faltered, including purchasing the US operations of Aviva.

Twenty-two banks and other financial institutions advised on the float. They were led by Goldman Sachs, Barclays, Citigroup and Wells Fargo Securities.

Via FT