Swiss Re sells half its Phoenix stake for £437m

Phoenix Group-Standard Life office in Lothian Road, Edinburgh

Swiss Re said on Wednesday it has reduced its shareholding in Phoenix Group Holdings plc, acquired in the sale of ReAssure in 2020, by selling a 6.6% stake for £437 million through an accelerated bookbuilding process.

Swiss Re sold 66.2 million shares at £6.60 each to new and existing institutional investors. Phoenix Group shares fell about 2% to around £6.77.

Closed life and pension fund consolidator Phoenix Group is the owner of the “old” Edinburgh-based Standard Life Assurance.

Standard Life Aberdeen sold Standard Life Assurance Limited to Phoenix Group Holdings for £3.28 billion in August 2018.

Standard Life Aberdeen, currently changing its name to Abrdn, retains a 15.35% stake in Phoenix Group.

Phoenix said Japan’s MS&AD Insurance Group Holdings retains a 14.5% shareholding in Phoenix and “is committed to its strategic relationship with Phoenix and expects to remain a significant shareholder.”

Swiss Re said: “In connection with the sale, Phoenix gave its consent to Swiss Re to conduct this transaction prior to the expiry on 23 July 2021 of the lock-up arrangement agreed between the parties.

“The sale is expected to close on 25 June 2021 …

“Swiss Re has agreed to a lock-up arrangement in respect of its remaining stake of approximately 6.6% in Phoenix of 90 days following closing, subject to waiver, as is customary for such a trade.”

Phoenix Group said: “Phoenix Group Holdings plc notes that Swiss Re has today announced the successful sale of 66,199,917 shares in Phoenix, representing approximately 6.6% of Phoenix’s total issued share capital.

“The sale was effected by way of an accelerated bookbuild to a range of new and existing institutional investors.

In order to support an orderly sell down and improve trading liquidity in Phoenix, in accordance with the terms of the relationship agreement between the two parties dated 22 July 2020 (the Relationship Agreement), the Phoenix board provided its consent to Swiss Re to proceed with this transaction in advance of the expiry of the 12-month lock-up period that was agreed under the terms of the Relationship Agreement.

“Following the settlement of the transaction, Swiss Re’s holding in Phoenix will be approximately 6.6% of Phoenix’s total issued share capital.

“As a result of Swiss Re’s holding falling below 10% of Phoenix’s total issued share capital, the Relationship Agreement shall cease to be effective and Swiss Re shall no longer be entitled to appoint a non-executive director to the Phoenix Board.

“As a consequence, Swiss Re has given notice that its nominated representative, Christopher Minter, will resign from the Phoenix Board with effect from settlement of the shares sold by Swiss Re, which is expected to take place on 25 June 2021.

“Swiss Re has agreed with its bookrunners to a separate lock-up of 90 days following the sale in respect of its residual holding in Phoenix, subject to waiver by the bookrunners.”

Phoenix chairman Nicholas Lyons said: “On behalf of the board, I would like to thank both Christopher for the significant contribution he has made since joining the board in July 2020 and Swiss Re for its support during its time as a significant strategic shareholder.

“MS&AD Insurance Group Holdings, Inc., whose lock-up period also expires in July 2021, continues to retain a 14.5% shareholding in Phoenix.

“MS&AD is committed to its strategic relationship with Phoenix and expects to remain a significant shareholder.”