Serial business-buyer Phoenix Group was the talk of the trading floor yesterday after completing a £3.2billion deal for Standard Life Aberdeen’s insurance business.
As part of the agreement SLA will get £2.3billion in cash and a 19.9 per cent stake in Phoenix.
Over the years, Phoenix has built a business hoovering up closed life books, known as ‘zombie funds’.
The SLA deal means Phoenix will almost double the number of policyholders on its books to 10.4m, while it will receive an extra £158billion in assets.
It also marks the end of a 193-year association with the insurance industry for SLA, which was formed last year through the merger of Standard Life and Aberdeen Asset Management.
Buyout boost: Phoenix Group has completed a £3.2bn deal for Standard Life Aberdeen’s insurance business
Martin Gilbert, co-chief executive of SLA, said: ‘Today’s announcement represents a logical next step in Standard Life Aberdeen’s journey to build a world-class investment company, positioning us strongly for the future and enabling us to meet the evolving needs of our customers and clients.’
Phoenix’s shares finished up 7.3 per cent, or 55.5p, at 815p. However, Standard Life Aberdeen’s price was down 2.5 per cent, or 9.6p, to 376.1p.
Just to confuse everyone, the similarly-named Phoenix Asset Management rode to the rescue of troubled stamp collector favourite Stanley Gibbons in a £19.5million deal yesterday.
Fund manager Phoenix, which owns three-quarters of toy maker Hornby, has bought a 58 per cent stake in the firm and has agreed to write off £7million of debt.
STOCK WATCH – DRIVER GROUP
Shares in construction consultants Driver Group soared after it told investors its performance had exceeded expectations.
In a trading update yesterday, results in the first four months of the year ending September 30 were ‘significantly’ ahead of forecasts.
It means the company, which was founded in 1978 and floated in 2015, is on track to beat the £1.2million profit it reported for 2017.
Shares shot up 14.5 per cent, or 9.5p, to 75p.
It will also give the stamp firm £5.4million of working capital for its day-to-day operations and to buy new stock. Jersey-based Stanley Gibbons, founded in 1856, had been struggling under the weight of its debts and there were fears for the future of the company.
But the Phoenix deal has calmed investors’ nerves and shares shot up 10.3 per cent, or 0.5p, to 5.35p.
Meanwhile, the FTSE 100 finished down for the second day in a row, falling 0.11 per cent, or 7.98 points, to 7244.41. The FTSE 250 fared better, ending the day up 0.33 per cent, or 64.99 points, at 19,801.05.
Shares in Welsh chipmaker IQE, whose technology is used in Apple’s iPhone, continued their recovery after hedge funds accused the firm of deceiving investors earlier this month.
Not one for shirking a skirmish, plucky US investment firm Muddy Waters Capital branded the Cardiff-based firm an ‘egregious accounting manipulator’.
Muddy Waters claimed CSC, a joint venture between IQE and Cardiff University, was nothing more than an ‘alter ego’ of the Welsh firm and did not have any customers – well, apart from IQE itself.
It argued IQE, which of course has refuted the claims, was misleading its investors.
Drew Nelson, chief executive of IQE, told this column that Thursday’s announcement of a new tie up between CSC and tech firm ICS to create components for high-speed broadband was proof that Muddy Waters had been talking a load of old tosh. Investors sided with IQE: at closing yesterday IQE’s share price was up 12.5 per cent, or 15.5p, to 139p.
Shares in Rightmove inched higher after the firm released a set of stonking results.
Its revenue jumped 11 per cent in 2017 while profits were up 10 per cent as the firm managed to persuade a record number of estate agents to list their properties on its site. It now advertises more than 1m properties, the firm said. Shares rose 4 per cent, or 172p, to 4482p.
However, rival On The Market struggled yesterday, despite announcing Chancellors Group of Estate Agents had started advertising properties on its website. Shares were down 2.7 per cent, or 4.5p, to 162p.