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Just Retirement sees shares soar amid bid hopes

Analysts believe a life office such as Legal & General, Aviva or Prudential could swoop on Just Retirement following news that the company has received expressions of interest.

Panmure Gordon & Co analyst Barrie Cornes says bigger life companies have made limited progress in the enhanced annuity sector using their own underwriting data.

In a stockmarket announcement following speculation in the weekend press, Just Retirement said discussions are at a very preliminary stage and it is not yet certain if an offer will be made. It is understood to be looking to net £300m through any sale.

The company’s share price rose by more than 50 per cent on Monday morning from 48.5p to 75p after the announcement was made. The specialist provider of retirement products floated on the stockmarket in 2006 at 148p a share. Deutsche Bank has been appointed to field bids. Group chief executive Mike Fuller says: “We believe that some of the bigger life offices will struggle to apply a scientific basis to their pricing and underwriting of enhanced annuities, not having got the historical data on which to base this.

“Whether any of the big annuity providers would like to make the move into the enhanced sector, either by developing organically their own propositions or through acquisition, remains to be seen.”

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