Royal Clients Face Float Hard Sell
Sydney Morning Herald
Saturday March 8, 2003
Royal & SunAlliance will attempt to boost demand for the $2 billion float of general insurance, life and superannuation group Promina by offering its three million customers a guaranteed allocation of shares worth $5000.
But to be assured of the allocation, customers of AAMI, Australian Pensioners Insurance and Tyndall will have to pre-register on the 1800 hotline or complete a form online by Friday, March 28.
Marketing for the float begins this weekend. Promina tomorrow starts a television and newspaper advertising campaign to entice investors to pre-register.
The group also confirmed yesterday that retail investors would get a discount to the final offer price paid by institutions, which is still to be determined.
Non-customers who pre-register will get a priority allocation of $3,500. For all applicants, the final number of shares allocated could be scaled back if there are oversubscriptions.
Promina's eagerness to see its customers represented among its shareholder base and solidify their loyalty throws out a direct challenge to its main competitor, Insurance Australia Group, whose policyholders received shares on its demutualisation in 2000.
Promina, the renamed Australasian operations of Royal & SunAlliance, confirmed the float process had moved into full swing, in line with the plan to list in the first half.
Pre-registered investors will receive a prospectus and personalised application form in April. It is understood that the group hopes to list some time in May.
The group has provided scant financial details because of pre-prospectus advertising restrictions, but London parent Royal & SunAlliance's #940 million ($2.44 billion) annual loss, reported on Thursday night, included robust performances by its Australian general insurance operations.
As recent profit results by QBE and IAG have shown, the industry is enjoying a benign claims environment and rising premiums, particularly in commercial classes of insurance. But weak equity markets have constrained the bottom line results and make it a difficult time for Promina to float.
Promina's funds management arm, Tyndall, has been one of the top performing fund managers in difficult markets, though inflows have been stymied by uncertainty about its ownership.
Promina's chief executive Mike Wilkins said the group was not running a trade sale process parallel with the float. Goldman Sachs and Macquarie Bank are joint global co-ordinators for the float, which could be the biggest Australian float of 2003.
© 2003 Sydney Morning Herald