Saga and Shoe Zone announce IPOs

Over 50s insurance company Saga Group could soon float on the London Stock Exchange, along with British retailer Shoe Zone.

In a move that some reports say will raise £430 million helping to cut its debt pile, Saga's initial public offering (IPO) will be available to the group's customers and private investors. Its Eligible Saga customers are likely to get incentives and allocation preference over other investors.

"Earlier this year the board of Saga announced that we were considering options for the future ownership of the Saga Group. One option is a flotation on the London Stock Exchange," the group said.

Despite the majority of the group's revenues coming from its insurance arm, it is yet to decide whether it will be classified as a "leisure" or "insurance" company, which could anger City investors as a leisure listing could boost the group's valuation, the Evening Standard reported.

The flotation is expected to value the company at £3 billion, with full details of the offer being available in a prospectus on the group's website during the offer period.

The offer is only available to those with a main residence in the UK, Channel Islands or the Isle of Man, and investors are encouraged to register their interest to avoid missing out on the placing.

The group said: "No decision has been made on timing, though the business is in a strong position and able to proceed with the flotation if and when that decision is made."

Shoe Zone

British retailer Shoe Zone also announced its flotation plans on Monday, which will see the company admit its ordinary shares to trading on AIM in May.

The placing will offer its shares to UK-based institutional investors and is expected to raise up to £50 million, valuing the company at around £100 million.

The funding will provide financing options, "if required", to help the company reach its "strategic objectives". These include expanding internationally, opening new stores in new areas to target its demographic and launching a low cost store refit programme.

Shoe Zone also intends to launch new promotional material and plans to invest further in multichannel growth, which will see it develop further sales channels, including establishing concession agreements, business to business sales, building on its handbag and shoe-care ranges and solidifying existing marketing links with other value retailers.

Chief executive Anthony Smith said: "Shoe Zone has a strong market position as a leading UK specialist value footwear retailer and we believe we are well placed to benefit from any growth in the UK footwear market. We have a robust track record of consistent and profitable growth with a cash generative business model which we expect will deliver an attractive yield for investors."

Shoe Zone reported pre-tax profit of £9.3 million in 2013, with average online transactions being 57% higher than in-store, helping the sales channel see turnover growth of 27%.

The company has 554 stores and was considered to be "the only specialist value retailer among the top 10 footwear retailers in 2012" in a Mintel survey, the company said.