Float to value Saga at up to £2.5bn

Saga expects its shares to be priced at between 185p and 245p when it floats on the London Stock Exchange later this month.

This means the over-50s insurance broker will have a market capitalisation of between £2bn and £2.5bn.

Conditional trading in Saga shares is expected to start on 23 May, with unconditional trading starting on 29 May.

As previously announced, Saga will raise net proceeds of £550m from the initial public offering (IPO), which it will use to reduce its net debt to £700m.

The IPO will comprise between 25% and 50% of Saga’s issued share capital.

Current parent Acromas is expected to sell a portion of its stake in Saga as  part of the flotation.

Saga executive chairman Andrew Goodsell said: “Today’s announcement reflects the strong level of investor interest shown in acquiring Saga shares, which we believe underlines the potential that exists in the company.

“We have also been enormously pleased with the positive response from customers to the announcement that we intend to IPO the business and are looking forward to further strengthening our relationship with customers by allowing them to invest in the business.

“We are fortunate to have a discerning customer base that can see the long-term strength of the Saga brand. Today’s announcement is a further important step in our journey toward becoming a public company with our customers and employees at the heart of it.”

Chief executive Lance Batchelor added: “Everyone at Saga has been delighted by the positive response to the news that Saga intends to IPO. Saga is a classic British brand, offering a unique portfolio of products and services to the over-50s market. The strength and breadth of Saga is reflected in the positive response that we have received to the offer.”