Trading in Omega shares begins this week on AIM
Trading in Omega Underwriting Holdings plc shares will begin on Wednesday (6 April) priced initially at 115p after the Lloyd’s insurer confirmed it was to float on the Alternative Investment Market (AIM) of the London Stock Exchange in an IPO which values the firm at £44.9mn.
Privately owned Omega – which manages the historically profitable Lloyd’s Syndicate 958 – has raised net proceeds of £18.24mn in the initial public offering which was underwritten by Omega’s adviser and broker Numis Securities Ltd.
As predicted in the March edition of The Insurance Insider, Omega listed to provide further flexibility with its capital structure. It currently only owns 13 percent of the stamp on its syndicate – most of which is currently financed by a quota share with the reinsurer Aspen which is up for renewal at year-end – but is keen to grow this share over time.
In addition, the company says it has: “considered for some time that opportunities exist for the future development of the business through investment or acquisition either in the distribution chain, alternative platforms or in other areas where this would provide a good strategic fit for the business of the group”.
Omega’s Syndicate 958 was founded in 1980 and is underwritten by the insurer’s chief underwriting officer John Robinson. Of the 437 syndicates trading that year, only three – including 958 – have traded through with a record of unbroken underwriting profit.
According to Omega’s chief executive officer Richard Tolliday, the IPO was supported by a “dozen, or so, blue chip institutions”. He said the insurer was “very encouraged by the reaction we received from investors” and added: “We are still very optimistic about market conditions and Omega is a business that has a track record of profitable returns throughout the cycle.”
Following the placement, the directors will hold 43.55 percent of the enlarged issued ordinary share capital. No existing shareholders sold any shares in the offering.