Phoenix Share Discussion Threads

[jonwig] 12/10/2015 12:17

A price tag of £3bn ... PHNX is valued by the market at £1.9bn. Quite a meal!

[speedsgh] 12/10/2015 12:14

Deutsche Bank Said to Mull Sale of Abbey Life Insurance Unit -

Deutsche Bank AG, Germany’s largest bank, is considering the sale of a unit that helps pension funds protect themselves against the risk of their members living longer than expected, according to people familiar with the discussions.

No decision has been taken on the potential sale of the Abbey Life unit, said the people, who spoke on condition of anonymity because the matter is private. The Bournemouth, U.K.-based business may fetch as much as 3 billion pounds ($4.6 billion), one person said...

...Phoenix Group Holdings Plc, a London-based company that had held talks to buy Guardian, may be interested in bidding if Abbey Life is put up for sale, said a person familiar, who asked not to be identified. A spokeswoman for Phoenix declined to comment.

“We feel that there are more sellers than buyers in the market,” said Ming Zhu, an insurance analyst at Canaccord Genuity Corp. in London. Companies like “Phoenix are in quite a good position. Doing a deal is the only thing left on their agenda to do to meet all of their targets.”

[santar] 06/10/2015 08:19

Phoenix Group Holdings is registered in the Cayman Islands with the principle place of business as Jersey.

[jonwig] 06/10/2015 08:17

dave - foreign-registered: Cayman Islands.

[davegk] 06/10/2015 08:13

Bought some this morning, pleasantly surprised not to be charged stamp duty. Anyone know why?

[skinny] 23/9/2015 12:26

Thanks for the updates.

[speedsgh] 23/9/2015 12:08

jonwig - good spot. here is another take on the news -

[jonwig] 23/9/2015 06:40

FT:

Global reinsurer Swiss Re has announced a deal to buy Guardian Financial Services for £1.6bn, amid a flurry of deal-making in the insurance sector.

Swiss Re said one of its units, Admin Re, will buy the business which is currently owned by private equity company Cinven.

As recently as a few days ago there were reports that Guardian Financial Services had held discussions with Phoenix Group, another insurer, about a potential tie-up. Two years ago, long-running multibillion-pound merger talks between Swiss Re and Phoenix Group ended without a deal.

Some irony there.

[spittingbarrel] 17/9/2015 17:07

Thanks ds, that makes sense.

[dangersimpson2] 17/9/2015 16:16

Since they don't sell anything new their raison d'etre is consolidating closed life funds.

My (admittedly simplistic) understanding of the benefit of this is that in order to protect policy holders regulation requires these life companies to hold capital against the risks in their portfolio. By consolidating life funds then either the risks can be netted off against each other or the variance of potential outcomes is reduced (due to the law of large numbers.) This means that less capital is required which accrues to the owners of the business i.e. shareholders.

The second saving is by moving policy holders to a combined admin system.

This is what they mean by cashflows due to management actions - legally combining the entities and releasing the surplus capital to the holding company. Some capital is released as policies mature and paid out but to keep the larger cashflow due to management actions coming in Phoenix need to combine more policies.

Due to these factors policies that are transferred to Phoenix are worth more to Phoenix than their current owners since when combined into Phoenix they require less capital to be retained and less admin costs. Therefore it should be a win-win for smaller books of busines to be bought by Phoenix.

The market reacts positively to these deals because assuming that Phoenix don't overpay for these closed books and give all of the upside to the vendors then buying policies adds value to Phoenix due to the ability to release further capital.

I'm sure someone more knowledgable about the industry can correct me if I've misunderstood anything.

[spittingbarrel] 17/9/2015 14:45

A bit confused why Phoenix should be so strong today after this news, can anyone enlighten me?

[skinny] 17/9/2015 07:05

The Board of Phoenix Group Holdings ("Phoenix" or "the Company") notes recent media speculation regarding a possible acquisition of Guardian Financial Services.

As stated at the time of the 2015 Interim results on 20 August 2015, Phoenix believes there are a number of potential acquisition and consolidation opportunities in the UK closed life sector and has been reviewing those options within the framework of its existing commitment to stakeholders. Having secured an investment grade rating earlier this year, the Group is well positioned to take advantage of the consolidation opportunities in its sector.

In this context, Phoenix has been evaluating Guardian Financial Services as part of an on-going sale process for the Guardian Financial Services business. Discussions remain on a non-exclusive basis. There can be no certainty that these discussions will lead to any transaction.

Further statements will be issued if appropriate.

[scottishfield] 10/9/2015 19:03

Good for you edmund, I'm sure we won't be disappointed. (here)

[edmundshaw] 10/9/2015 18:46

scot, yup, good adding point; so I added. :-)

Will replace my Amlin shares - different animal, but another nice performer on yield and capital gain. The figure for expected cash generation over 5 years is really mouth-watering...

I havelargely exiting the cat-sensitive Lloyds insurance market for now; it has done well, but rates are pressured from multiple fronts and sooner or later a big catastrophe or two will hit profits (though it will help rates longer term). Still hold Beazley, but that's it now.

[skinny] 10/9/2015 11:48

Canaccord Genuity Buy 850.25 850.00 890.00 Upgrades

[scottishfield] 08/9/2015 10:15

Good adding point around here imo.

[sogoesit] 01/9/2015 10:20

That's great... I am holding :-))!

But, actually I was thinking of adding when I get my chunky dividend in October or before if there is weakness; or should I do CSN or should I do both... decisions, decisions!

[skinny] 28/8/2015 11:57

A hold today - Canaccord Genuity Hold 832.25 850.00 850.00 Reiterates

[jonwig] 28/8/2015 11:47

IC is positive.
Summary:

Management maintains that the capital drag is a short-term effect: Phoenix remains on track to hit targets of £200m-£250m in cash generation this year and - more importantly - £2.8bn between 2014 and 2019. Meanwhile, the shares trade 23 per cent below embedded value, with a dividend yield in excess of 6 per cent. Buy.

[scottishfield] 27/8/2015 11:24

X dividend today

[stevenrevell] 27/8/2015 11:23

What's happening ere we r down everything else is up

[jonwig] 21/8/2015 07:40

IC comment:

Closed-book life insurance group Phoenix Group (PHNX) generated £110m of cash in the first half, compared to £332m in the first half of 2014, reflecting the need for its operating companies to transition to a lower-debt, higher-capital model under the new Solvency II regulatory regime. One notable achievement was an investment-grade credit rating from Fitch. We still see value in the shares. Buy.

[jonwig] 20/8/2015 18:47

Some Bannister comments were reported in the press but weren't in the RNS. (Maybe from the presentation which I haven't seen yet.) ...

Telegraph: Mr Bannister said Phoenix was scouting further takeovers, despite a pause in the market while insurers are preoccupied with capital levels. “We said there would be a hiatus while Solvency II comes through. People don’t know the value of what they are buying or what they are selling, and the capital requirements associated with them,” he said.

“We remain convinced that the reasons that people will sell their business remain true: the need for capital, and specialised skills.”