Phoenix Group to Explore SunLife Sale

Insurance services provider Phoenix Group (LON: PHNX) announced Wednesday that it intends to explore a potential sale of its SunLife Limited business.

SunLife is a leading provider of financial protection products directly to the over-50s market in the UK and reported a profit after tax of £16 million in 2023. Phoenix Group acquired Sunlife and French firm Axa’s UK investment, pensions and insurance businesses for £375 million in 2016.

Phoenix said that after a strategic review, it has concluded that the business is “no longer core to the delivery of its vision of becoming the UK’s leading retirement savings and income business.”

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As a result, it has decided to begin a sale process, having received several initial expressions of interest from third parties. However, Phoenix warns that there can be no certainty at this stage a disposal will occur and that a further announcement will be made in due course.

Phoenix Group’s stock closed Tuesday’s session up 0.2% at 526.5p a share.

In April, analysts at Barclays slashed their rating for Phoenix Group to Underweight from Overweight, cutting the price target to 500p from 600p a share.

They told investors that Phoenix has insufficient cash from operations alone to support management’s targets. It also highlighted what it sees as a weaker capital position than peers and a dislike for its change in strategy from historical areas of strength to areas where PHNX is not meaningfully differentiated.