Standard Life Aberdeen (LON:SLA) is set to return up to £1.75 billion to investors, the blue-chip company has said. The move has been prompted by the sale of the bulk of the FTSE 100 group’s insurance business to Phoenix Group, announced earlier this year.
Standard Life Aberdeen’s share price has fallen into the red in London this morning, having given up two percent to 352.70p as of 09:44 BST. The stock is marginally underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 1.47 percent lower at 7,616.45 points. The group’s shares have given up more than seven percent of their value over the past year, as compared with about a one-percent rise in the Footsie.
SLA to return £1.75bn to investors
Standard Life Aberdeen announced in a statement this morning that it was proposing capital return of up to £1.75 billion with £1 billion to be returned to shareholders by way of a B share scheme, and the remaining up to £750 million to be returned by way of a share buyback programme. The move is related to the proposed sale of the group’s UK and European insurance business and the board expects that here will be surplus capital within the company.
“The last year has been a period of significant change for Standard Life Aberdeen with the proposed sale of the UK and European insurance businesses completing our transformation to a capital light investment company,” SLA’s chairman Sir Gerry Grimstone commented in the statement, adding that the proposed capital return represented over 15 percent of the company’s market capitalisation at close of business on May 25.
Analysts on blue-chip asset manager
The 15 analysts offering 12-month price targets for Standard Life Aberdeen for the Financial Times have a median target of 460.00p on the shares, with a high estimate of 490.00p and a low estimate of 376.00p. As of May 25, the consensus forecast amongst 18 polled investment analysts covering the blue-chip group has it that the company will outperform the market.