The former owner of Saga is returning to the over-50s travel and insurance group by investing £100 million to shore up the company’s finances.
Sir Roger de Haan, who sold Saga for £1.35 billion in 2004, will inject the funds in return for a stake in the company of about 20%. The business is seeking a further £50 million from existing investors.
Saga said that de Haan would spend £60.6m buying 20% of Saga shares at 27p per share, almost twice the closing price of 13.61p on August 28.
He will also invest up to £39.4 million in share placings at a maximum issue price of 15p per share.
Alongside his investment, Sir Roger would join the board and become non-executive chairman, taking over from Patrick O’Sullivan, for an expected term of three years.
A further placing at a maximum price of 15p a share to existing investors is expected to bring the total fundraising to £150 million.
In a statement, the company said: “The proposed equity raise is intended to strengthen the company’s financial position against the backdrop of the Covid-19 outbreak and the ongoing suspension of travel and to better position Saga for longer-term recovery and growth.”
De Haan, whose father Sidney founded Saga in 1948, took over the business in 1984 before selling it to a management buyout team funded by the private equity group Charterhouse.
The company said it had considered other options to improve its balance sheet and added: “In determining to proceed with this capital raising and place the company on a stronger financial footing, the board considered a number of options and also recently evaluated and rejected an unsolicited and highly conditional 33p indicative approach for the company from a consortium of two US financial investors.
“This 33p offer followed several earlier indicative approaches from the consortium which commenced at a significantly lower valuation. The investors have since confirmed that they are no longer considering an offer for the company.”