Phoenix Group considers selling SunLife in shift to focus to UK retirement savings
The FTSE 100 group said it is looking for a buyer for the over-50s financial services business, as it is no longer core to the delivery of its vision.
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.
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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.
