November 12, 2013 / 9:48 AM / 6 years ago

UPDATE 2-Just Retirement valued at $1.8 bln in London share listing

* Priced shares at 225 pence each, middle of range

* Company raised 300 mln pounds from new shares

* Private equity group Permira to retain 62.4 pct stake

By Kylie MacLellan

LONDON, Nov 12 (Reuters) - Britain’s Just Retirement , a provider of pensions to retirees with health problems, was valued at 1.1 billion pounds ($1.8 billion) in its London listing on Tuesday.

Just Retirement, backed by private equity group Permira, priced the sale of a 30.5 percent stake at 225 pence per share, the middle of its original 200p to 250p range.

Its shares opened flat before hitting a high of 228.8p. By 0940 GMT they had dipped to trade down 0.2 percent at 224.5p.

Just Retirement, which was listed on London’s junior Alternative Investment Market before being bought by Permira funds in 2009, raised 300 million pounds from the sale of new shares to strengthen its capital position and drive growth.

Existing owners, including Permira and company management, will bank a total of 43.2 million pounds. This could be increased by 15 percent if an overallotment option, whereby more stock can be sold if there is strong demand, is exercised.

If that option is not exercised, funds managed by Permira will retain a 62.4 percent stake in the company.

Strong equity markets this year have revived the market for new European listings, with more raised in October than any month since July 2011, according to Thomson Reuters data.

Attractions operator Merlin Entertainments saw its shares rise 10 percent in their London market debut last week, while renewable energy generator Infinis Energy is due to begin trading in London on Friday.

Most demand for Just Retirement’s sale, which was oversubscribed within a few days of launching last month, came from UK investors, two people familiar with the matter said, with good interest also coming from U.S. investors.

Just Retirement’s core business is to offer annuities to retirees with serious health conditions such as heart disease and those who smoke heavily. These annuities pay out a higher income than more conventional products.

The company is also a provider of “lifetime mortgage” products, used by pensioners to supplement retirement income by unlocking some of the value of their homes.

Its sale follows the flotation of its private equity-backed rival Partnership Assurance, which has seen its shares rise more than 9 percent since its June debut.

The offer price values Just Retirement at around 13.4 times consensus estimates for 2014 earnings, one of the people familiar with the matter said, a slight premium to Partnership which is trading at around 13.2 times.

Deutsche Bank and Nomura were joint global co-ordinators and joint bookrunners on the sale of Just Retirement.

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