Aviva announces Delta Lloyd terms

19th Oct 2009 15:09

Insurance giant Aviva is set to earn more than €1bn from its proposed spin-off of a large part of its Dutch financial services subsidiary, Delta Lloyd.The insurer announced on 5 October that it would be sell a minority stake in Delta Lloyd and has now confirmed that it will sell 42% of the company by means of a flotation of shares and a private placement.The flotation will comprise up to 63.5m ordinary shares in Delta Lloyd plus an over-allotment option of up to 6.35m ordinary shares. The offer price will be set after a book-building process and will be somewhere within the range of €15.50 to €19.00 per share.The offer price range values the whole of Delta Lloyd at between €2.6bn and €3.1bn while Aviva said it expects to receive gross proceeds of around €1.2bn from the spin-off. Following the flotation, Aviva will hold 57% of the ordinary share capital of Delta Lloyd and control 53% of the voting rights. Fonds NutsOhra, a charitable trust, will continue to hold preference shares in Delta Lloyd with some 8% of the voting rights.Aviva will retain the right to nominate two Delta Lloyd Supervisory Board members and will be required to approve any transaction which would result in Aviva's voting rights being diluted below 50%.'This step, which will be the largest IPO [initial public offering] in Western Europe this year, will free up capital for us to use elsewhere and will give us the option of exploring further growth opportunities,' said Andrew Moss, group chief executive of Aviva.