Reinet in talks with Athora Holdings about £5.7bn stake in UK pension group

Reinet Investments, after days of media speculation, said Thursday that Athora Holdings had approached it about selling its stake in UK-based Pension Insurance Corporation Group (PIC) as part of a wider deal worth about £5.7 billion (R136.4bn).

The deal could push Athora, which operates in the savings and retirement services markets in countries including Germany, Belgium, and the Netherlands, into the UK, believed to be the largest retirement market in Europe. The PIC manages about £50bn in assets and has nearly 400,000 policyholders in the UK.

Reinet Investments, which is also listed on the Euronext Amsterdam and Luxembourg Stock Exchanges, said the announcement on the talks followed further press speculation concerning the possibility of a sale of PIC, in which Reinet owns an indirect 49.5 percent interest.

Reinet, which had initially alerted shareholders about the speculation on Friday and is 24.9% owned by the Anton Rupert family trust, said Thursday that it has been approached by Athora Holdings and is in advanced talks relating to the potential disposal of its interest in PIC.

“The terms of the proposal imply a consideration payable for 100 percent of the fully diluted share capital of PIC of about £5.7bn, as at the date of this announcement.” The PIC’s other shareholders include the Abu Dhabi Investment Authority and US credit investor HPS I.

“There can be no certainty that any possible transaction contemplated in this announcement will proceed nor as to the terms of any such transaction,” Reinet's directors said in a statement, adding that a further announcement would be made in due course.

Reinet’s share price slipped 2.32% to R583.45 on the JSE Thursday morning after the release of the announcement, but the speculation has seen the price rise by over 15% since June 25. Reinet's market capitalisation on the JSE Thursday was about R113.64bn.

In the six months to September 30, Reinet received €235 million in ordinary and special dividends from its investment in PIC. Dividends from Reinet’s other big investment, in British American Tobacco (BAT), amounted to €68m.

However, in January, Reinet sold 43.31 million shares in BAT to institutional investors, raising some £1.22bn in the process and exiting its stake in the tobacco group entirely. Based on available figures, Reinet might potentially raise another £2.8bn from its sale of its stake in PIC.

Reinet said that by the end of the interim stage last year, its net asset value of €6.6bn reflected a compound growth rate of 9 percent per annum in euro terms since March 2009, including dividends paid.

Net asset value per share at 30 September 2024 was €36.25. Meanwhile, Athora generated €3.7bn of organic new business growth in the year to December 31, 21% higher than the new business growth the previous year. At year-end, it held €2.2bn in equity capital, of which €1.7bn was available to be used to pursue growth.

The Financial Times reported online that the possible Athora acquisition comes at a time when US private capital giants such as Apollo, Brookfield Asset Management, KKR, and Carlyle have either begun operating in the UK retirement market or studied acquisitions in recent years.

PIC CEO Tracy Blackwell said in a statement in March: “PIC had a strong year in 2024, completing new business premiums of £8.1bn, our largest ever total, guaranteeing the pensions of an additional 62 000 pension scheme members. At year-end, we had insured the pension benefits of almost 400 000 people. As ever, our focus remains on providing exceptional customer service, and at year-end, we had a customer satisfaction rate of 99%, having now made total pension payments of more than £16bn.”

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