Chesnara buys Save & Prosper

Chesnara is buying pensions and life assurance products manager Save & Prosper from JPMorgan for £63.5m as part of its consolidation strategy for the European life and pensions sector. The purchase price is at a discount to embedded value of £93m (£184m at the end of June 2010 minus £91m extracted by JPMorgan). A placing raising £26.7m at 200p a share will help Chesnara to finance the acquisition with the rest of the cash coming from new bank debt.S&P's revenues have been in decline, partly because it has been closed to new business. S&P, which was founded in 1936, had 174,000 policies at the end of June 2010. Revenue from Chesnara's own life assurance funds will diminish over time and S&P will help to offset this. The acquisition will enhance Chesnara's embedded value per share Chesnara