The former chief executive of Saga, the over-50s insurance and travel provider, is to stage a stunning comeback as part of a £150m capital-raising to shore up its coronavirus-hit balance sheet.
Sky News has learnt that Sir Roger de Haan, who sold Saga for £1.3bn in 2004, is to inject up to £100m into the company in return for a stake of close to 20%.
The firm placing to Sir Roger will be conducted at a substantial premium to the current share price of just 13.61p, insiders said this weekend.
A further placing of shares, to raise roughly £50m more, will then occur to give existing investors the chance to participate, they added.
That second tranche of stock may be placed at a discount to the price paid by Sir Roger, who will become Saga’s non-executive chairman.
A source said that Patrick O’Sullivan, who became chairman in 2018, had volunteered to step down in order to facilitate the deal.
The fundraising will be one of the most unusual of the scores announced by London-listed companies since the outbreak of the COVID-19 pandemic.
Saga is expected to confirm its intention to raise virtually its entire current market capitalisation through the two placings as soon as this weekend, following Sky News’s disclosure of the plans.
One source said Sir Roger’s decision to inject as much as £100m into Saga at a premium to its current value was a sign of his confidence in the company’s management and strategy.
His return to the business will represent a remarkable comeback 16 years after selling it to Charterhouse, the British private equity firm, for £1.35bn.
Sir Roger, the son of Saga’s founder Sidney de Haan, has not been a shareholder in the company since then.
Charterhouse and Permira subsequently merged Saga and the AA to form a holding company called Acromas.
That was followed by a break-up which saw Saga raise £550m in an initial public offering in London in 2014.
At the time, the company was worth well over £2bn, while on Friday it closed with a market capitalisation of just £150m.
Coincidentally, the AA is also in the midst of plotting a significant transaction, either in the form of a major refinancing or a sale to private equity firms.
Towerbrook Capital Partners, one of the buyout shops examining an offer for the AA, has also considered bidding for Saga in recent months but is now not pursuing a deal, according to City sources.
Several other private equity firms have also been contemplating approaches to Saga about a takeover.
Like other cruise and tour operators, Saga has seen substantial chunks of its operations brought to a halt by the coronavirus crisis.
It has said it hopes to resume cruises later this year, although Saga and other operators have said they expect passengers to return only slowly.
The company is now run by Euan Sutherland, the former chief executive of Superdry and – briefly – the Co-operative Group.
It disclosed last year that Elliott, the activist hedge fund manager, had taken a 5pc stake, prompting expectations of a break-up or other corporate activity.
In recent months, it has focused on strengthening its balance sheet, warning investors that it would be unable to pay dividends while repayments of loans taken on to acquire new cruise ships were outstanding.
Saga also has a sizeable insurance business, selling a broad range of products targeted at the so-called ‘grey market’.
Since the COVID-19 outbreak, Mr Sutherland has praised the loyalty of Saga’s travel customers, most of whom have deferred, rather than cancelled, bookings.
Mr Sutherland is expected to set out details of a revamped strategy alongside Saga’s interim results next month.
JP Morgan and Numis are working on the equity-raising.
A Saga spokeswoman declined to comment on Saturday.