Hastings Direct plans £1.5bn London listing

Insurer has been growing rapidly – and would deliver huge return for backers

(Image credit: Getty Images)

Hastings Direct is set to join the ranks of insurers listed on the London Stock Exchange, after announcing it would seek to float in a deal that could value the business at up to £1.5bn.

The company confirmed the plans in a statement before the stock market opened today, in which it said it wants to raise approximately £180m "in a bid to accelerate its growth", Sky News reports. Around 25 per cent of shares would be listed – "the minimum required to for a UK company listing" – and if the valuation is correct it would immediately enter the FTSE 250.

The deal would also "crystallise a huge return for Goldman Sachs", the Wall Street bank which paid £150m for more than 45 per cent of Hastings' equity two years ago. A roughly equal shareholding is controlled by the company's founders, with the balance held by management and employees, who also stand to get a big windfall.

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The Daily Telegraph says over the past six years Hastings has "increased the number of live customer policies on its books from 480,000 to 1.88 million and it now has roughly 5.5 per cent of the UK private car insurance market". Profits rose 17 per cent in the year to December 2014, with management thought to be targeting an annual dividend of between 50 and 60 per cent of post-tax earnings.

One worry for the firm is the recent volatility of stock markets, which has calmed in the UK in recent sessions but could begin afresh depending on the outcome of the US Federal Reserve's rates meeting this week and developments in China, where the benchmark stock market has tumbled again this week.

"The thing we can't control is volatility in the stock markets," said chief executive Gary Hoffman. "It's calmed down in the last 10 days, and that's good, but for us, we have a company that's well-placed now to join the public markets."

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