Phoenix Group is reportedly looking into a possible sale of its SunLife financial services division. The potential sale triggered a dip in shares for the insurance and retirement company, with analysts speculating that the move seems « slightly odd ».
Phoenix announced to investors on Wednesday morning that it’s considering finding a buyer for the finance specialist for over-50s. The FTSE 100 company stated: « Following a strategic review, the group has concluded that this business is no longer core to the delivery of its vision of becoming the UK’s leading retirement savings and income business. »
« The board has therefore decided to begin a sale process, having received a number of initial expressions of interest from third parties. »
The firm made clear there is « no certainty » that it will ultimately sell the business.
Phoenix acquired the SunLife division in a deal valued at £375 million back in 2016. According to Phoenix, SunLife reported a pre-tax profit of £16 million in 2023.
Abid Hussain, an analyst with Liberum, shared: « At first glance, it is slightly odd that a life consolidator would be making a disposal, but remember, under their new strategy, it is hoping to transform into a proper life insurance company focusing on the retirement space (pensions and annuities). »
He further explained that « Management concluded the protection book did not fit any more. »
« With a 10 percent dividend yield and more cash, potentially, coming in the door to support the capital generation and avoiding an upgrade of legacy protection systems, this makes some sense. »
Phoenix shares experienced a 1.6 percent decrease following early trading.
