Hastings ‘very pleased’ with share capital offer from investors

Motor insurer Hastings confirmed a cash offer from existing investor Rand Merchant Investment Holdings Limited (RMI) and financial firm Sampo Oyl to buy Hastings’s issued and to be issued share capital that is not already controlled by these parties – the insurer’s group chief financial officer John Worth believes this is a great indication of the appetite for overseas companies to invest in the UK insurance market.

As part of the publication of its H1 financial results on Wednesday, Hastings chief executive Toby van der Meer announced: “We have announced this morning that the group’s Independent directors and the directors of Dorset Bidco Limited, a consortium comprising Sampo Oyj (Sampo) and Rand Merchant Investment Holdings Limited (RMI), have reached agreement on the terms of a recommended cash offer to acquire the issued and to be issued share capital of Hastings, not already owned or controlled by Sampo and RMI.

”The offer will be subject to shareholder approval and the receipt of regulatory and anti-trust approvals.”

Speaking to Insurance Times about the deal, Worth added that Hastings is “very pleased to accept that offer”.

He said: “We think there’s very good alignment between those two companies and our culture and what we are seeking to do as a leading digital insurer. The board is very pleased to accept that offer.

“We think that the price they’ve offered at £2.50 a share plus the 4.5p dividend, which goes to existing shareholders, is a good price that appropriately recognises the inherent value in the company. Clearly a good uptick in the share price, which is pre the announcement on an undisturbed basis, so it’s a 47% increase on the share price pre the announcement.”

Worth continued that the deal won’t influence Hastings’s current strategy, vision or initiatives as both RMI and Sampo have been supportive of the firm’s work and approach; RMI has been a shareholder since 2017.

Furthermore, Worth described the offer as “the next chapter in Hastings”.

He continued: “We do think that things will continue by way of investment and growth. We think it’s a good thing for colleagues, we think it’s a very good thing for Hastings and a good thing for shareholders.”

More broadly, Worth added that the cash offer is also a positive sign for the broader insurance market in the UK. He explained: “It really evidences the interest that there is in overseas companies in investing in the UK and investing in the UK insurance sector and the opportunities that they see here, but more widely investing in the UK.

“Aside from Brexit, aside from Covid-19, to be subject to this type of interest in investment is terrific.”