Aviva (LON:AV) is exploring a sale of its Friends Provident International unit, which offers life assurance and investment products, Reuters has reported. The sale could raise between $500 million and $700 million for the FTSE 100 insurer.
Aviva’s share price has gained ground in London in today’s session, having added 1.17 percent to 529.13p as of 13:36 BST, following upbeat comments at Jefferies which raised its valuation on the stock. The group’s shares have added more than 16 percent over the past year, and are up by just under nine percent in the year-to-date.
A source with knowledge of the matter told Reuters today that Aviva was exploring the sale of its Friends Provident unit, and had already received preliminary interest from about half a dozen Chinese firms and European funds for the business. The FTSE 100 group took control of the unit as part of its takeover of former London-listed rival Friends Life back in 2015.
The news comes after Aviva recently updated investors on its full-year performance, posting a rise in operating profit. The blue-chip insurer further unveiled plans to return capital to shareholders, having strengthened its balance sheet.
Jefferies meanwhile lifted its price target on Aviva by 14 percent to 600p. Reuters quoted the analysts as saying that the move reflected “the share buyback confirmation and our increased confidence in management’s capital reallocation and earnings growth plans”.
The 18 analysts offering 12-month price targets for Aviva for the Financial Times have a median target of 520.00p on the stock, with a high estimate of 595.00p and a low estimate of 420.00p. As of March 24, the consensus forecast amongst 20 polled investment analysts covering the blue-chip insurer has it that the company will outperform the market.