Saga share price: Group delays shareholder refunds

on Jun 5, 2014
Updated: Apr 9, 2020
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iNVEZZ.com, Thursday, June 5: Saga (LON:SAGA), the cruises-to-insurance group for the over-50s which floated on the London Stock Exchange last month, has delayed refunds to some investors who applied for shares but failed to receive any during the float, the BBC has reported.

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In other Saga news, hedge fund GLG Partners has bet against the insurer in the wake of the company’s lacklustre initial public offering (IPO).
Saga’s share price, which closed 3.09 percent lower at 172.50p yesterday, has clawed back some losses this morning, having added 0.26 percent to 172.94p as of 08:38 BST.
**Shareholder refunds delayed**
The BBC yesterday quoted the lifestyle group as saying that a number of people who had applied for shares in the Saga IPO, but failed to receive any, were still awaiting a refund. The company noted that while refunds were processed last Thursday, administrators Capita said that they had encountered “problems within the banking system”.

Last month, Saga said it had seen strong demand from retail investors, with a ‘substantial majority’ of the shares going to the company’s loyal customer base. (Saga IPO sees strong retail demand) The company noted that customers, who had applied for the minimum amount of £1,000, had received their full allocation of 540 shares, but warned that some applications had been scaled back.

The BBC quoted the company as saying that refunds by debit card should be completed by today, although there might be some which would fall outside of this period.
“We sincerely apologise in advance to those customers who do not receive their refund by 5th June,” Saga added.

**GLG Partners shorts Saga shares**
The Telegraph yesterday quoted a filing with the Financial Conduct Authority as showing that hedge fund GLG Partners, part of Man Group, had taken a short position of 0.61 percent in Saga. Funds borrow stock to take short positions, meaning that they make a profit when the share price drops.
Saga’s share price has fallen about seven percent below its IPO price of 185p, set at the bottom of the company’s guidance.

Alex Brog, of financial information provider Markit, told The Telegraph that 10.4 million Saga shares were currently out on loan, the equivalent of 2.3 percent of the company’s free-float. The insurer listed with a 27 percent free-float, barely above the minimum required under London’s listing rules, after Saga’s parent Acromas scrapped plans to sell some £300 million worth of shares in the IPO.
Saga’s shares, which had previously been hovering around the float price, have taken a hit this week amid reports that Bank of America Merrill Lynch, the co-lead adviser of the Saga IPO and a stabilising manager, was running out of firepower in keeping the shares above the float price. (Saga share price slides as IPO adviser struggles to prop up shares)
The Saga IPO has attracted criticism among some analysts who have said that the group’s disappointing debut has ‘killed’ the market for further floatations, while others have pointed to ‘float fatigue’ among investors following a flurry of activity.
**As of 08:40 BST, buy Saga shares at 174.00p.**
**As of 08:40 BST, sell Saga shares at 172.75p.**

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