Aviva Share Discussion Threads

[yump] 29/11/2024 18:42

How do you post that Italian mafia hand across the throat symbol?

[jubberjim] 29/11/2024 17:10

I could hazard a good guess

Turkeys don t vote for Xmas

Not in the normal course of events.

[martyre] 29/11/2024 15:15

Didn't realise the CEO,CFO & COO all joined Direct Line from Aviva.Not sure what Amanda will do with them if the bid succeeds.

[jubberjim] 29/11/2024 12:53

My own view is this is where there should be a Stewards

Neither Aviva or Direct Line have covered themselves with glory.

'Openess' full disclosure to the wider market.

There is a taint and while I am happy to have got out of a hole there must be rumblings as to what exactly has happened here.

In short the whole thing stinks.

My view !

[dope007] 29/11/2024 12:44

Direct Line bosses need to wake up. aviva are right to go straight to shareholders as the DLG board are morons. the stock price was sub 160p for a reason and management is one of them

[stoopid] 29/11/2024 11:35

From Hargreaves Lansdown Direct Line is playing hard to get, again, as the board rejects a tentative takeover offer from Aviva. This isn't the first offer in 2024, having rejected multiple attempts from Belgian insurer Ageas earlier in the year. But there's a case to be made that Aviva is a better suiter, given it already shares markets with Direct Line in the UK.It's no secret that Direct Line has struggled over the past few years to deal with a challenging motor insurance market, and operational missteps have been a drag on performance. But there's a fresh management team focussing on core areas like Motor and Home insurance and recent results that have painted a better picture.Since Motor makes up nearly half of all active policies, unprofitable contracts written over the past 18 months have weighed on recent performance. But aggressive price hikes have finally caught up with inflated costs. Last we heard, new policies are being written at levels in line with a net insurance margin of above 10% - back in the land of profit.The Motor division isn't back to delivering positive margins just yet, but that should fix itself over the second half. Direct Line was slower to raise prices than the wider market which means it'll take longer to feel the benefits than peers.But, policyholders tend to be fickle and are happy to switch around in search of a better deal. Motor customer numbers are still falling, though the pace is slowing. That's okay in the short term, while margins are the priority. Further out, we'll be hoping to see the introduction of Direct Line to price comparison sites as a catalyst for customer growth.Aside from Motor, performance across other business lines has been pretty good. Home insurance is a big part of the operation and remains profitable despite an uptick in claims inflation. Price hikes are again being called on, but customer numbers are proving a little more resilient than in Motor.Capital levels are back at comfortable levels, and the board's decided to keep an added buffer in place while the transformation efforts run their course. It's also taking a more prudent approach to dividends with a new policy based on paying out 60% of post-tax earnings. We think this is a good move given the market's cyclical nature.This version of Direct Line looks more attractive than it has been for some time. However, with so much change in senior positions and a turnaround effort that's far from complete, there are ongoing challenges. Plus, at least in the short term, the valuation is likely to be driven by takeover enthusiasm, which adds another layer of risk.

[skinny] 29/11/2024 11:01

That had crossed my mind - as you say - all speculation! :-)

[yump] 29/11/2024 10:49

“Considerable conviction”

Could we see the CV’s of the DLG BOD, so we can see what they actually achieved at Aviva then ?

Because I don’t go along with the head-hunting revolving door BS.

[jubberjim] 29/11/2024 10:41

Sold half my holding here today.

Think the market is getting a bit carried away as everything else is struggling to make any headway.

More upside and better dividends elsewhere but not diving in just yet as think others are struggling .

Now liquidity of 28 % so hope I am right.

It has been known

Still keeping a not insignificant holding but feel better in my gut

Good luck

[muscletrade] 29/11/2024 09:42

Sometimes things don't work out as expected. All this "excitement" may draw full attention to the value in Aviva itself. Based upon premium being speculated upon for DL, some larger fish might realise that AV is a steal at its current valuation and come up with an offer for AV at circa £7.(which I have long said is probably the actual minimum T/O price)

AV undervaluation is of course true for any number of London listed companies.

I'm not saying this will happen. All idle speculation (fun) on my part.

[spud] 29/11/2024 09:26

Thin end of the wedge cfro - Before you know it, the offer's at 300p and we're well into overpaid territory. FOMO is a great wealth dissipater.spud

[cfro] 29/11/2024 09:20

AV could pay a little more for DLG say 270-80p and it would still be a great deal for all imo.

For those with spare cash might be worth a punt on DLG right now..

They have until Xmas day...

[muscletrade] 29/11/2024 08:28

@Masureguy, thanks for posting that timely note from UBS which provides some comfort.
One of the historic and continuing problems with Av is its pretty dismal ROE, especially ween compared to say L&G.If this deal happens then ROE will/should improve.

[skinny] 29/11/2024 08:27

That's all very nice and 590p would be very acceptable, but analysts have been coming up with these pie in the sky target prices for AV for years - yet the last time the price was over £6 was before the financial crisis.

[masurenguy] 29/11/2024 08:10

Direct Line takeover would accelerate Aviva's 'capital-light' strategy, says investment bank

If Aviva PLC does eventually take over Direct Line Insurance Group the acquisition could significantly accelerate its move toward capital-light earnings, according to UBS. Aviva has offered roughly £2.50 per share for Direct Line, a 55% premium on its recent share price, with the deal structured as part cash and part Aviva shares. If successful, the acquisition would give Aviva a commanding 22% share of the UK personal insurance market, surpassing Admiral. Direct Line’s board has rejected the offer, claiming it undervalues the company. Aviva projects the deal would deliver annual cost savings of £150m and capital synergies worth £450m. UBS analysts estimate a 17% boost to Aviva’s earnings per share within two years while keeping debt at manageable levels. It says 'buy' up to 590p.

[muscletrade] 29/11/2024 07:45

@cjac39, I too would have expected Av share price to have dropped more than it has so far but as tornado points out there are clear benefits to be gained at the right price.Also if Av doesn't buy DL then someone else ( a powerful competitor), probably will.

I suppose we have to put our faith in the CEO. She has not put a foot wrong since her tenure started and I cannot see her compromising that success with a frivolous tilt at DL if it didn't make total sense.(he says hopefully).

[tornado12] 29/11/2024 07:26

Market sees a lot of sense and potential efficiencies in the deal. Clear we expect the market cap to increase as result (adding more shares without significant share price drop). Just important they do not pay over the odds for it

[cjac39] 29/11/2024 07:11

isnt it curious that av is down so little relative to the dilution that comes with using shares?

[tornado12] 29/11/2024 07:00

Strong coverage again in the FT this morning. Looks like a bid sweetner is immanent

[pj84] 28/11/2024 21:19

From the above: -

Aviva asks Direct Line shareholders to back second bid

FTSE 100 insurer speaks to investors directly after board rebuffs £3.3bn approach

Michael Bow

Chief City Correspondent

28 November 2024 7:26pm GMT

Aviva is contacting Direct Line’s shareholders in an attempt to convince them to back a takeover bid, after the motor insurance giant’s board rebuffed an £3.3bn approach.

The FTSE 100 insurer has been speaking to Direct Line shareholders directly to tout the benefits of the tie-up after its original tilt at the group was rebuffed by Direct Line’s board, led by Danuta Gray.

The move, first reported by the Financial Times, paves the way for a possible hostile bid situation should Direct Line’s board reject an expected second bid.

[skinny] 28/11/2024 19:16

One top 20 Direct Line investor said: “The offer undervalues the business, especially as Aviva has motor so they can combine them and extract synergies.”

The market Obviously does not agree, which is why the share price was where it was!

[pj84] 28/11/2024 18:40

A snippet from the FT article: -

One top 20 Direct Line investor said: “The offer undervalues the business, especially as Aviva has motor so they can combine them and extract synergies.”

However, he added that most Direct Line shareholders would probably tender their shares at 300p.

Many market analysts believe Aviva will need to raise its bid to win over Direct Line.

“Aviva could be persuaded to sweeten the deal to 260p-265p, which may help satisfy the DLG board,” said Peel Hunt in a note.

“There is downside risk to DLG’s standalone strategy and retaining some upside in an Aviva-DLG combination could be an attractive proposition, which is worth exploring in our view.”

Dan Coatsworth, investment analyst at AJ Bell, said Direct Line had “tremendous221; brand strength in the general insurance market and significant scale, which made it a highly attractive takeover target.

“Should Aviva be able to dig deeper and offer something in the region of 275p, Direct Line’s shareholders might feel that Christmas has come early.”

Under the takeover code, Aviva has until 5pm on December 25 to make either a firm offer or announce that it does not intend to a make one."

[smurfy2001] 28/11/2024 18:12

Sounds like hostile takeover

[whatsup32] 28/11/2024 18:02

FT. ‘Aviva goes direct to shareholders’