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Direct Line Insurance Group PLC on Wednesday rejected a bid approach from Belgian insurer Ageas SA, calling it ‘unattractive’ and ‘uncertain’. The Bromley, England-based motor and home insurer said it received a highly conditional, non-binding proposal from Ageas on January 19. The terms of the bid were 100 pence per share cash plus one new Ageas share for every 25.24047 Direct Line share. As at closing on February 27, the proposal implied a value of 233p per Direct Line share. Shares in Direct Line jumped 24% to 203.10p each in London on Wednesday. Meanwhile, shares in Ageas fell 2.3% to €38.41 each in Brussels. Direct Line said it ‘unanimously rejected’ the proposal on January 29, believing the ‘highly opportunistic’ approach ‘significantly undervalued Direct Line Group and its future prospects’. Direct Line said it was confident in its standalone prospects given its strong strategic position, powerful brands, and robust capital position. It pointed out Adam Winslow will take up the role as chief executive on March 1. He is tasked with refreshing the strategy and operational focus of the group with the clear objective of returning to a sustainable level of operating profit over time. He will be replacing CEO Penny James, who agreed to step down immediately in January last year after the company skipped its final dividend due to a big increase in weather related claims causing a loss on underwriting. Direct Line advised shareholders to take no action in relation to the possible offer. Earlier, Ageas confirmed it made an approach for Direct Line. A combination offered ‘compelling strategic and financial value for both Ageas and Direct Line shareholders’, Ageas declared. Ageas highlighted the potential to drive operational improvements and efficiencies, in part through the removal of overlapping overhead costs after the integration of Ageas’ and Direct Line’s UK businesses. Direct Line, which has a market value of around £2.57 billion, was created through an initial public offering from Royal Bank Of Scotland‘s insurance division in 2012. Copyright 2024 Alliance News Ltd. All Rights Reserved.
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