Talanx secures €300m capital increase to fund strategic growth plans
European insurer Talanx has secured gross proceeds of €300 million from a capital raise aimed at increasing its free float and improving the trading liquidity of its shares, as well as its position in equity indices. The company intends to use these funds to fuel both organic growth and strategic acquisitions.
Talanx placed 4,878,048 new shares to institutional investors by way of an accelerated bookbuilding process at a price of €61.50 per share.
The company’s majority shareholder HDI also offered a further 1,626,016 Talanx shares worth approximately €100 million from its own holdings, reducing its shareholding in Talanx’s from 78.9 percent to 76.7 percent.
Once the transaction has closed, Talanx’s free float will increase to 23.3 percent from 21.1 percent. The new shares to be issued will bear dividend rights as from January 1, 2023. New shares are expected to start trading on the Frankfurt Stock Exchange/Hannover Stock Exchange on September 27, 2023
Talanx said the funds will go towards supporting further organic and inorganic growth in line with the “disciplined approach for the execution of strategic acquisitions”.
Jan Wicke, Talanx Group’s CFO, said the move is in response to “repeated requests from investors” to increase Talanx’s free float and to lay the foundations for improving the shares’ trading liquidity, as well as strengthen the position of Talanx’s shares in a number of equity indices.
Following the completion of the placement, Wicke said: “Demand for our shares was excellent. This not only confirms our attractive business model and our operating strength, but also shows that our shares still have potential. We hope that our higher free float will have positive effects on daily trading in, and turnover of, our shares, and that it will strengthen the stock’s position in a number of indices. All in all, we have now laid the foundations for more investors to invest in our shares.”
Talanx has also reaffirmed its earnings guidance for the current year and its medium-term goals, also on the basis of the increased equity base going forward. This applies in particular to the target dividend payments to shareholders.
Talanx plans to pay its shareholders a dividend of more than €2.00 per share for the financial year 2023. The expected positive effects in relation to the recent acquisition of Liberty Mutual in Latin America are not yet reflected in these medium-term-goals, which it claims are set to achieve a profit of €1.6 billion by 2025.
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