Aviva Increases Offer for Direct Line Insurance Group to £3.4 Billion
Aviva has increased its offer for Direct Line Insurance Group to about £3.4 billion (S$5.8 billion), days after its initial proposal to buy the UK motor insurer was rejected, people with knowledge of the matter said.
New Proposal Seeks to Convince Direct Line’s Board to Engage
London-listed Aviva has made a fresh bid of about 261 pence per share as it seeks to convince Direct Line’s board to engage, the people said, asking not to be identified because the information is private. The new proposal is about 4 per cent higher than Aviva’s initial cash and stock proposal of 250 pence per share last week, which was rejected by Direct Line.
Uncertainty Surrounds Whether Latest Proposal Will Be Enough
It’s unclear whether Aviva’s latest proposal will be enough to bring Direct Line to the negotiating table. Direct Line said last week that Aviva’s proposal was “highly opportunistic” and that its new leadership team would be able to deliver attractive growth.
Analysts Predict Increased Offer
Earlier this week, Berenberg increased its target price for Direct Line to 270 pence per share and said management sees a clear path to executing their strategic plan. Berenberg analysts wrote that Aviva has “ample capacity” to raise its bid, and said their base-case scenario is for an increased offer of 275 pence. JPMorgan Chase analysts have also written that Aviva might need to increase its bid to more than 275 pence in order to win approval from Direct Line’s board.
Deliberations Ongoing, No Certainty of a Deal
Deliberations are ongoing and there’s no certainty they will lead to a deal, the people said. A spokesperson for Aviva couldn’t immediately comment, while a representative for Direct Line declined to comment.
Conclusion
Aviva’s increased offer for Direct Line Insurance Group has raised questions about whether it will be enough to convince the company’s board to engage in negotiations. While analysts predict an increased offer, there is no certainty that a deal will be reached.
FAQs
Q: What is Aviva’s new offer for Direct Line Insurance Group?
A: Aviva’s new offer is about 261 pence per share, which is about 4 per cent higher than its initial proposal of 250 pence per share.
Q: Will Aviva’s latest proposal be enough to bring Direct Line to the negotiating table?
A: It’s unclear whether Aviva’s latest proposal will be enough to bring Direct Line to the negotiating table. Direct Line has previously rejected Aviva’s proposal, calling it “highly opportunistic.”
Q: What do analysts predict will happen next?
A: Analysts predict that Aviva may need to increase its bid to more than 275 pence in order to win approval from Direct Line’s board. Berenberg analysts have increased their target price for Direct Line to 270 pence per share.
Q: Will there be a deal?
A: Deliberations are ongoing, but there is no certainty that a deal will be reached.
