Looks like the major shareholders in DLG did want this deal after all but were waiting out for that increased offer..
275p seems a very fair price and should be a great deal for shareholders in both companies imo. |
Have they got this at somekind of bargain price ?... I am not convinced, but I trust our CEO can squeeze out the top value out of this.. Lets see how the market reacts.. GLA |
Great they have come to an agreement for both AV and DLG share holders |
 Aviva and Direct Line announce that they have reached preliminary agreement on the financial terms of a potential acquisition of the entire share capital of Direct Line by Aviva (the "Proposal").
Based on Aviva's last closing share price before the offer period started, being 489.3 pence per Aviva share, the Proposal represents total consideration valued at
275 pence per Direct Line share
to be delivered as:
o 129.7 pence per Direct Line share in cash, funded through Aviva's internally available cash resources;
o 0.2867 new Aviva shares per Direct Line share; and
o dividend payments of up to 5 pence per Direct Line share in aggregate (the "Permitted Dividend"), to be paid (subject to the approval of the Board of Direct Line) prior to completion.
This represents a premium of:
o 73.3% to the closing Direct Line share price on 27 November 2024 (being the last closing share price before the offer period commenced); and
o 49.7% to the six month volume-weighted average Direct Line share price to 27 November 2024. |
Why don’t bidders build their position to just under 30% at market rates prior to making an approach like in the good old days? Aviva could have done this and probably picked the shares up at 160-170p average and then gone hostile if they chose to. |
Looks like Aviva are going hostile and will accept whatever the market decides. No problem as there are other alternatives for Aviva to invest and grow. |
Aviva Nears Preliminary Deal With Direct Line After Bump
UK insurer said to sweeten offer again after £3.4 billion bid
Direct Line may announce Friday it’s inclined to recommend bid |
UK insurance group Aviva has raised its offer to buy Direct Line in a move that would value its smaller rival at about £3.4bn, just days after its first approach was rejected.
Aviva is proposing to pay about 261p a share for Direct Line, up from its first offer last week of 250p, which valued the company at £3.3bn, according to people familiar with the situation.
Direct Line and Aviva declined to comment. |
Aviva raises offer also in FT |
Insurance giant Aviva plc has increased its offer for Direct Line Insurance Group PLC (LSE:DLG) to £3.4 billion, according to a Bloomberg report citing “people with knowledge of the matter”.
The reported 261p-per-share offer comes a week after Direct Line rejected an initial offer from Aviva valuing the business at £3.3 billion.
Direct Line said the bid was “highly opportunistic and substantially undervalued the company”.
Aviva insisted the initial offer was “a highly attractive proposal with high execution certainty, which also met Aviva's strict financial criteria for acquisitions”.
Direct Line has yet to comment on the reported second offer.
The Financial Times reported that one top Direct Line shareholder would only expect the board to consider an offer above 250p.
Proactive has requested a comment from Direct Line on the reported second offer |
1robbob... Don't hold your breath. |
Aviva Said to Boost Direct Line Takeover Bid to £3.4 Billion https://www.bloomberg.com/news/articles/2024-12-05/aviva-is-said-to-boost-direct-line-takeover-bid-to-3-4-billion |
A 2nd bid of around 260p seems quite reasonable and insinuate’s AV. Isn’t going to over pay, as analysts were expecting a 2nd bid of 270p. Judging by the current share price reaction market is happy with this.
Let’s see what happens when it’s official! |
There was a spike down in AV. prior to 15:30 and a 20p spike up at DLG at the same time. Guessing a 2nd bid is imminent. |
261p is at the low end so probably will be positive for Av.
Question now is will it be acceptable to DLG and is there an alternative offer from interested parties. |
I think dreaming. The whole point of buying them is to extract economies of scale. Savings by getting rid of duplication one CEO removed saves a load of staff, and a load of staff will go too. |
I strongly suspect that Adam Winslow, before he left AV, harboured hopes of succeeding Dame Amanda when she stepped down
Dare I suggest that; if he personally was able to retain similar bonus terms as at DLG to achieve the reconstruction of the DLG business within AV and at what Dame A would demand...'At Pace'; he might be mindful to propose acceptance of a bid from AV at around the current indicated 'Offer'
...especially if it was indicated that he had a chance of succeeding Dame A!!
Or perhaps I am dreaming!! |
cyberian - whilst I agree with your logic for the medium term , here we are in December , close to end of year
bonuses and I question whether insti traders are more interested in the short term.
So your logic is best for the overall , but a higher bid and mark to market profit just before year end , may be a higher bonus ?
Would not put it passed them. |
rob...the reason for my comment is simply that there is a cross over of Institutions holding in both sets of shares, and there would be the possibility of more upside for Aviva share increase in value over time in my opinion not to increase the Aviva proposed offer. Institutions will also be considering the more assured dividend yield with Aviva over that of DLG. DLG shareholders would get some cash from the bid and a bundle of Aviva shares which are more likely to increase in value if the current proposed offer is accepted. My assumption maybe misplaced and happy to be corrected. |
Looks like the city has got wind of something, that spike is significant for a no news day so far. |
cyberian
Why is it...'NOT in the mutual interests of Institutions to willingly try to encourage Aviva to make a higher formal offer'
Surely it is in their interest to obtain as high a price for their Investment |
*DEUTSCHE BANK RESEARCH RAISES AVIVA TO 'BUY' (HOLD) - PRICE TARGET 545 (535) PENCE |
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