By Vladimir Guevarra 
 

LONDON--Tungsten Corporation PLC, a new acquisition vehicle founded by Edmund and Danny Truell, aims to create a GBP1 billion financial services company through several acquisitions and revive its plan for an initial public offering--with an IPO launch likely in the fourth quarter of this year, Edmund Truell said Wednesday.

"We've set up a cash shell and wanted to list. But three or four weeks ago the whole world was about to implode and it wasn't a good time to float a business," Mr. Truell said, referring to the withdrawal of Tungsten's IPO in May due in part to market volatility caused by the European debt crisis.

"What we're now doing is we're in due diligence with a couple of targets. We will then come back to the markets after the summer, hopefully with a done deal. We then can present a particular business, probably an insurance operation, to the market. Then people will know exactly what they're investing into," Mr. Truell, also a non-executive director of Tungsten, told Dow Jones Newswires.

"We can come back in the autumn and say: 'This is the deal. This is the business we're buying. These are the terms in which we're buying it and this is the plan for the business going forward. Now buy the shares.' This is different from asking for money and we'll tell you about it later," Mr. Truell said.

He said the planned IPO launch "is a fourth-quarter activity."

He said Tungsten has identified over 50 financial services firms from the U.K. and other parts of Europe as potential targets. "We've got seven possible targets in motor insurance alone. We're running two or three different possibilities and we hope to conclude one in a couple of months," he said.

He said the "theme" or nature of the new business would either be in motor insurance, life insurance or specialty finance.

"We will have only one theme. Let's imagine it's motor insurance. We'll then only invest in motor insurance but we might have two or three companies in motor insurance," he said.

He declined to name Tungsten's financial backers but said: "We've got a number of major investors who are prepared to support us, which is great."

"We're targeting a market cap in the region of GB1 billion. It's not small. We have a high quality board, so we need something big enough to get them out of bed," Mr. Truell said.

Tungsten's board chairman is Arnold Hoevenaars, who is also chairman of the internal supervisory committee of Pensioenfonds Zorg en Welzijn, a Dutch pension fund which holds over EUR105 billion of assets.

Michael Spencer, founder and chief executive of FTSE100 interdealer-broker ICAP PLC (IAP.LN), is a senior independent non-executive director of Tungsten.

Mr. Truell said the insurance businesses of Royal Bank of Scotland Group PLC (RBS) and Lloyds Banking Group PLC (LYG) are also potential targets, but said Tungsten may not need to buy whole insurance operations. "We may look at some of their businesses and brands but not all of them," he said.

Mr. Truell said the macroeconomic problems in Europe won't prevent Tungsten from pursuing acquisitions before the end of the year.

"I don't think the problems in Europe would have cleared by then and I wouldn't bet on better markets. But I'm confident because so many financial services companies, like banks, insurers and so on, have to sell businesses. I'm confident that we'll be able to do a very attractive acquisition... We don't expect to overpay for a good business," he said.

The Truell brothers also founded Pension Corporation, a pension insurance buyout company, about five years ago. Pension Corp. has since grown to insure 60,000 pension fund members from various companies and is now managing some GBP5 billion worth of assets.

Earlier Wednesday, South African investment firm Reinet Investments SCA (REI.JO) said it would invest GBP400 million into Pension Corp.

"They're (Reinet) investing new capital to help grow the business further and undertake more pension insurance buyouts," Mr. Truell said.

-Write to Vladimir Guevarra at vladimir.guevarra@dowjones.com. Twitter: @Vlad_DowJones