Direct Line Insurance Takeover Rumours (DLG)

Ageas pulls out off the takeover

The Board of Direct Line Group (the "Board") notes the announcement from Ageas confirming that it does not intend to make an offer for Direct Line Group. As a result, Ageas is bound by the restrictions set out in Rule 2.8 of the Takeover Code. The Board is confident in Direct Line Group's standalone prospects. As communicated at Direct Line Group's 2023 preliminary results on 21 March 2024, the Board believes under Adam Winslow's leadership the Company is well-positioned to drive material improvement in performance that is expected to unlock significant value for Direct Line Group shareholders.

Ageas deal is off otherwise after DLG fairly decent result with dividend reinstated . Ageas knows £2.50 won’t be accepted now . DLG SP will start to go back down as takeover no longer on the table

I have taken my profit as I agree that this is, at least over the remainder of 2024, a takeover play. I appreciate I am more comfortable doing this than some having an average under 160. Good luck to all and I hope a 250 offer does emerge for those still holding. I will continue to monitor and look to get back in if it falls without an improved offer.

Market thinking takeover more likely now? I think so.

This is just a takeover gamble if buying here. I sold on the takeover spike a week or so ago, and invested elsewhere. These results confirm to me personally that I did the right thing.

Nice to see some sort of dividend but nothing to inspire adding at these levels. Will hold what I've got but the dividend doesn't even begin to cover the anticipated rise in premiums. Await the takeover being raised and then cu later Good luck everyone. I ask again Skinny How on earth do you get the results out before I have even wiped the sleep out of my eyes. Are you an A.I Bot All the best

'serious takeover threat looming' ?? Not yet there isn't :-)

None of the board might survive the results with a serious takeover threat looming. Can they fend it off with a en even remotely poor trading statement? I doubt it.

A market perception :- https://www.lse.co.uk/news/direct-line-rejects-second-takeover-approach-from-ageas-shares-tumble-pa86t9umlteavkr.html

Pete I solely blame Penny and her team for the issues in direct line. Like I previously stated the Dividends were very attractive and for a long while direct line was a share I could buy and forget. I'm very confident the next set of results will kitchen sink any outstanding issues and soon it will all be in the rear view mirror. A 300p offer is a substantial 6 figure payout for me but will I then find an insurer in the ftse who paid Dividends as attractive as direct line? I doubt it so I for one will be voting against any takeover

Pinched from a poster on LSE... By Pablo Mayo Cerqueiro and Amy-Jo Crowley LONDON (Reuters) - Belgian insurer Ageas is pressing on with a potential takeover offer for Britain's Direct Line (LON:DLGD), bringing in a new adviser to assist with the efforts, three sources familiar with the matter told Reuters. Ageas has lined up Deutsche Bank (ETR:DBKGn) to work alongside its existing financial adviser Bank of America (NYSE:BAC), two of the sources said. It interviewed banks for additional support since making its offer public last week, the third one added. Ageas might sweeten the terms of its initial bid to win over Direct Line's leadership, two of the sources said. Ageas declined to comment, and has until March 27 to launch a formal offer or walk away under UK takeover rules. Deutsche Bank and Direct Line declined to comment.

Ageas have until the 27th March to make a firm offer. The requirement under the Takeover Code for a potential bidder to either announce a firm intention to make an offer in accordance with Rule 2.7 of the Takeover Code, or announce that it does not intend to make an offer, by not later than 5.00 pm on the 28th day following the date of the announcement in which the potential bidder is first identified, unless the Takeover Panel has consented to an extension of that deadline (Rule 2.6 (a), Takeover Code).

An interesting side question in this story is what happens if Ageas fail to go through with a takeover? One overlooked issue is the effect on Ageas. It could easily put them into play as a target for the real gorillas in the global insurance market (Allianz/Axa/Zurich/Generali and a few more left field options). Ageas have long been thought vulnerable given their mid rank size globally and a weak opening bid followed by a failure to follow up (meaning a lack of planning for initial rejection) would not look good. If I were their management this would be a factor in my thinking.

Direct Line’s apparent rejection of the 233p per share offer from Belgian group Ageas is a surprise, suggest analysts at Deutsche Bank, though they suspect a better offer is currently being drawn up. At the price, the bid was a 43% premium to the previous night’s close and implied a value of £3.1 billion. “We are not surprised that there could be interest - it has been mulled as a target, notwithstanding wider consolidation in the UK P&C space,â€￾ said the bank. “We value the shares at 250p, and even without a takeover bid, we like the shares on a 12-month view. Buy.â€￾

Jefferies 210 discounts for the risk that no bid proceeds. In reality this is a binary bet. If a bid proceeds it will go much higher. If not it may fall back to, say, 180. The Jefferies comparisons are interesting but ignore the fact that the Esure takeover was one of the worst made in the sector and vastly overpriced based on its underlying issues. The multiple for DLG will also be affected by its recent history and the need to discount for some lack of confidence in reserves, even after due diligence. But I agree that 270 is fair taking everything into account, including the brand value.

hTTps://www.bloomberg.com/news/articles/2024-02-28/uk-insurer-direct-line-said-to-reject-ageas-takeover-approach?utm_source=google&utm_medium=bd&cmpId=google

If they don't provide an update on restarting dividends, even at a low level, it will leave them a sitting duck for a takeover approach or an activist investor to royally agitate for a change of management, strategy or further earlier of assets.If they do announce an update on dividends restarting, it may well provide confidence for a bidder to come forward before the recovery gains too much pace.I.e. win, win - imho