According to British takeover rules, Aviva has until 25 December 2024 to make a firm offer or walk away
Aviva has claimed that Direct Line Group (DLG) will not engage further with it after attempting to acquire the insurer.
Yesterday (27 November 2024), it was revealed that Aviva submitted a proposal regarding a possible offer to acquire 100% of DLG for 250 pence per share.
The proposal, which is valued at £3.28bn, was rejected by DLG, with it concluding that the offer was “highly opportunistic and substantially undervalued the company”.
Aviva said the bid was designed to encourage “prompt engagement to commence the work needed to reach an offer announcement”.
However, the insurer said that after DLG rejected the proposal, it “has declined to engage further with Aviva”.
Reason for bid
Aviva said it had looked at purchasing DLG to expand in the UK personal lines market.
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DLG is currently looking to grow further in this area and is launching its flagship brand on price comparison websites (PCWs) as part of its refreshed strategy.
Aviva said: “Aviva believes that an acquisition of DLG would be consistent with its strategy to accelerate growth in its UK businesses and further pivot the group towards capital-light business lines.
“The acquisition would expand Aviva’s presence in the attractive UK personal lines market, building on its existing strength and creating a more efficient platform from which to serve existing and new customers.
“In addition, the acquisition would allow DLG customers to benefit from Aviva’s breadth, scale and financial strength.”
It added that a deal would help DLG carry out its current cost savings programme. DLG is aiming to remove at least £100m of costs by the end of 2025 on a run-rate annualised basis.
Aviva continued: “Aviva believes that the acquisition would deliver material cost and capital synergies, incremental to DLG’s existing cost savings programme.”
According to British takeover rules, Aviva has until 25 December 2024 to make a firm offer or walk away.
His career began in 2019, when he joined a local north London newspaper after graduating from the University of Sheffield with a first-class honours degree in journalism.
He took up the position of deputy news editor at Insurance Times in March 2023, before being promoted to his current role in May 2024.View full Profile
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