Saga Share price up by 2% at 9AM

on May 23, 2014
Updated: Apr 9, 2020
Listen, Friday, May 23: Shares in Saga (LON:SAGA), which floated on the London Stock Exchange this morning, are still trading above the IPO price.

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**Latest News:**
>> SAGA Shares commence trading amid fears of investor fatigue – Travelex close to abandoning listing plans
>> Saga share offer: Price set at 185p (NEW) for the IPO – Company’s total market capitalisation to be £2.1 billion

**Saga shares still hovering above float price**

As of 10:30 BST, LSE data show that Saga’s share price stands at 186p, slightly higher than the float price of 185p per share announced earlier this morning. Almost 300 million shares were issued, representing 27 percent of the overall value of the business, barely above the minimum required under London’s listing rules.

The Financial Times yesterday quoted unnamed sources familiar with the Saga IPO as saying that bankers handling the transaction had received enough orders to justify a price of 205p, at the top end of Saga’s recently narrowed price range. The sources however explained that if the shares had been priced at that level, investors such as hedge funds with shorter-term interests would have had a bigger allocation.

Ahead of the Saga IPO, trading on the IG Index’s grey market suggested that the over-50s insurer would not enjoy the success of Royal Mail’s market debut which saw shares in the postal services group soar 87 percent.
Shares in Saga (LON:SAGA) have inched higher in their first minutes of trading on the London Stock Exchange following the initial public offering (IPO) of the company which saw the over-50s insurer price its shares at 185p, at the bottom of its guidance announced earlier this month.

**Saga share price inches higher**
Data on the LSE show that Saga’s shares currently stand at 186.25p, slightly above the IPO price of 185p, having set a high of 195p earlier.
After pricing its shares at the low end of the price range, Saga will only sell £550 million of new shares with its shareholders, which include private equity groups Permira, Charterhouse and CVC, struggling to offload their stakes. Reuters today quoted an unnamed banker familiar with the matter as saying that the Saga IPO process had been “frustrating”.
“They’re barely going to sell,” the banker said. “This is the worst case scenario.”
**Pricing rationale**
Another source close to the Saga share offer told Reuters that there were “clearly some tensions”, and that Saga’s efforts to ensure a firm share price performance for its retail investors had led to a shift in focus away from giving the private equity firms their exit.
In today’s offer price announcement, Saga reported that 50 percent of its offer had been allocated to retail investors, including “a substantial majority” allocated to Saga customers. The company’s customers were able to take part in the floatation with a minimum investment of £1,000 and were also entitled to one free share for every 20 held after one year.
Saga said that its eligible customers had received preference in allocation at all levels with an allocation of between 540 shares and 5,000 shares and that applications at the minimum application amount of £1,000 had been met in full.
**Last 5 trades were in the range of 188.25 and 188.50 at 8:32AM on London Stock Exchange. Share price up by 2% at 9am.**
**Last 5 trades were in the range of 185.38 and 188.52 at 9:58AM on London Stock Exchange.**
**More to follow…**


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