Update on Phoenix deal
£1.75bn windfall for Standard Life Aberdeen shareholders
Gerry Grimstone: ‘a period of significant change’
Shareholders will receive a cash windfall following Standard Life Aberdeen’s £3.24 billion sale of its UK and European insurance business to Phoenix Group.
It plans to return up to £1.75bn to shareholders with £1bn paid out by way of a B share scheme at a minimum of 33.4p per share based on current expectations.
The remaining £750 million is to be returned by way of a share buyback programme.
A shareholder circular is expected to be published tomorrow with a general meeting for SLA shareholders to approve the proposed transaction and the proposed return of capital to be held on 25 June.
The SLA board expects surplus capital within the group following the sale to Phoenix with anticipated lower capital requirements.
The balance of proceeds will be use to pay down SLA’s outstanding debt of £1.9 billion and support investment and other general corporate purposes.
The deal is expected to complete in the third quarter of 2018.
Commenting ahead of today’s annual general meeting, Sir Gerry Grimstone, chairman, said: “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.
“We are continuing to focus on harnessing the breadth and depth in our investment capabilities to deliver cost effective solutions to meet the needs of our clients and customers across multiple channels and geographies.
“The cash generated from the sale will enable us to continue to invest in the development of our business and also to return surplus capital to shareholders.
“Our proposal to return up to £1.75bn by way of a B share scheme and share buybacks represents over 15% of our market capitalisation at close of business on 25 May 2018, and would extend our long-running track record of returning surplus cash to shareholders.“