Standard Life investors in line for £1.75bn windfall after surprise sale
Standard Life plans to return £1.75bn of capital to shareholders – almost a fifth of its current market value – after agreeing a surprise sale of its 180-year-old Canadian business for £2.2bn in cash. The buyer is the Canadian insurer Manulife and the two companies have agreed to collaborate globally to distribute each other’s investment products.
The £2.2bn price tag represents almost twice the book value of the business, about 19.5 times earnings. Standard Life will book a £1.2bn gain on the sale.
The disposal was announced and the terms, plus the payment to shareholders, should see Standard Life’s share price open higher this morning.
“We have transformed our Canadian operations into a business which has consistently delivered strong results, contributing to the overall success of the group,” said Nish. “As a result, the Canadian business is now a much more attractive proposition and the sale allows us to realise fully the value of the business for our shareholders.”
The cash return to shareholders is worth 73p a share, compared with Standard Life’s share price yesterday of 386p.
But Nish said the collaboration agreement with Manulife meant Standard Life was not leaving Canada.
“The collaboration is a natural extension of our existing strategy where we have established a range of global strategic partnerships and relationships,” said Keith Skeoch, chief executive of Standard Life Investments, the fund management division.
Source: theguardian
