Direct Line Insurance Share Discussion Threads

[stevensupertrader] 28/2/2024 18:36

The Board acting this way today - STINK .
LSE SHOUKD investigate this Ie look back at shares buying and selling from the time tge Board rejected the bid on 29 Jan . 2024 I can guarantee share price will fall back tomorrow .

[jrphoenixw2] 28/2/2024 18:34

CityAM this pm:
'Shares in Direct Line have surged higher by over 23 per cent today after the company confirmed that it had rejected a bid from Belgian insurer Ageas last month.

In a statement to the market, Direct Line said the offer was “uncertain, unattractive, and that it significantly undervalued” the firm and its future trading prospects.

The “highly opportunistic” bid, which valued the firm at around £3bn, was unanimously rejected by members of the board. Direct Line shares were trading at 202p each on Wednesday afternoon.

“The Board is confident in Direct Line Group’s standalone prospects given its strong strategic position, powerful brands, and robust capital position,” it said.

Although January’s offer was rejected, Ageas announced in a regulatory filing this morning that it was considering a possible offer that valued Direct Line at £3.1bn and offered shareholders .

Ageas “firmly believes that the combination of Ageas’ and Direct Line’s UK businesses will be beneficial for both Ageas and Direct Line shareholders”, the regulatory filing said.

It said: “Over the last 12 months, many of the UK sector fundamentals have improved as claims patterns and frequency have stabilised, while an evolution towards a healthier and more predictable market is being observed thanks to developing regulatory clarity and pricing practice changes.

“The repricing implemented in the sector in response to elevated inflation levels further underpins its resilience. Ageas has made significant progress with the repositioning of its UK business, as communicated during its Investor Day in November 2023, and is confident that the UK will play an important role in Ageas’ future growth ambitions by further strengthening one of Ageas’ home markets,” the statement added.

Direct Line has struggled in recent years, with its half-year results from September being described as “very poor” by Citi analysts, with pre-tax losses widening to £76.3m.

The Bromley-based insurer’s stock price has been on a steady decline, falling 46.6 per cent over the last five years, even with the spike today.

The firm’s new CEO, Adam Winslow, is set to begin in the position this week, following previous CEO Penny James’s departure from the firm last year due to an unexpected increase in weather-related claims.

Winslow previously served as UK and Ireland general insurance chief at Aviva.

In September, the firm agreed to sell its brokered commercial insurance unit for £520m, as it looked to shore up its balance sheet.

Panmure Gordon analyst Abid Hussain said: “Management has rejected a 233p per share offer for the group. We think the balance sheet issues have already largely been fixed following the recent disposal of the commercial business.

“It must now undertake the slow and hard work of fixing processes or its culture or both to react faster to inflation and other threats. The new CEO arrives at the end of the week to do just that. In the meantime, Ageas will need to revise its offer with a higher price or larger cash component or both to convince the board and shareholders.”

[carpingtris] 28/2/2024 18:34

I do like Justified 👍 re: 'Raylan Givens' comment.. a very good watch.

Totally off topic though!

[jrphoenixw2] 28/2/2024 18:25

From the daily chart^ note the almost sideways px tracking between 200 > 205p between c1.30pm and the close. A weird move after the 'alpine climb' preceding it between 11.30 and 1.15pm. Gives the appearance of a major holder who has put on a VERY fat limit-sell order around that level. Will be interesting to see if/when the share price breaks out higher through it.

For the record the LSE has the volume today as 45.5million. 210.60 was the i/d hi at c1.15pm pre that side-ways action mentioned above.

[jubberjim] 28/2/2024 18:22

I repeat what I posted earlier

That post having mysteriously disappeared

267 gets this done in the absence of any dividend announcement

Sans Esure have left my sell order there

Let battle/bottle commence

The sooner we get to it the sooner we get through it

"Raylan Givens"

Off we go

[stevensupertrader] 28/2/2024 18:18

The Board rejected it on the 29 Jan 2024 but only after rumours cane out this morning that the Board cane out a RNS many went fir tge kill but the Board knew that this was already rejected . Inside information - manipulation and many inside who knew this inside information that the bid was already rejected SOLD . Why tge aboard didn’t immediately gave a RNS saying it was already rejected last month and only after few hours lyre in the afternoon gave this offer was rejected . Just to me is fraud and manipulation by the Board - DISGUSTING

[laurence llewelyn binliner] 28/2/2024 18:08

The Board confirms that on 19 January 2024 it received a highly conditional, non binding indicative proposal from Ageas..

The Board unanimously rejected the Proposal on 29 January 2024.

Round 2..?

[wba1] 28/2/2024 18:03

It is worth looking in a bit more detail at the synergies;

The two companies (DLG and Ageas) have circa 13000 UK employees. I cannot believe a 10% reduction is not possible.
DLG bring various capabilities not present in Ageas UK which can be exploited;
- body shops and other repair capabilities
- rescue, which can replace/xsell to Ageas customers
- Darwin as a test bed
DLG brings scale which, added to Ageas existing business, should shave costs for external factors such as reinsurance
It should be possible to merge some activities and products onto common systems.
Pricing analysis should ensure reduction of lost premium where DLG and Ageas compete.
DLG's database is both bigger than that of Ageas and brings data in areas where Ageas will lack data and expertise. Similarly, Ageas will also bring some data expertise in areas such as RIAS.
The distribution capabilities are complementary. It may be possible to rebuild a broker commercial operation using DLG brands off the back of Ageas CL knowledge and broker base. Alternatively, the NIG knowledge held in DLG will benefit Ageas (even if the sale of NIG makes that a benefit they will deny).
Ageas is international and most overseas markets are much less developed in direct distribution (and in pricing techniques). If Ageas wish they can transfer DLG expertise to other subsidiaries.

These would just be my starting points. In any situation like this the starting point in data rooms will be reserve strength. Future reserve releases can be a big part of a valuation. I am assuming that, after recent strengthening, this will turn out to be in line with usual expectations.

[mrgorillaz] 28/2/2024 17:34

compared to the opening price of yesterday this is almost a full stock offer, 233 is hence the right price

direct line's management knows they'll lose their jobs cause they're bad it

[stevensupertrader] 28/2/2024 17:05

DLG rejected Brussels based , Ageas offer this Wednesday afternoon saying thr bid was too optimistic and undervalue DLG .
Latest . When RNS was announced , share price rocketed to £2.10 .

[huckers] 28/2/2024 16:58

RNS released by Direct Line formally rejecting the offer.

[wba1] 28/2/2024 16:25

As a poster has mentioned I did say 230 was fair value. But a bid, especially one which will deliver large synergies, should deliver a premium to fair value. I would be surprised if synergies were less than £400m pa across both companies (ignoring any one off benefits from disposals of property and the like). If that is the case it should be worth 30-40p over fair value.

I will be interested to see how DLG react, other than rejecting the offer. They must be clear they are now in play and that opens up a number of options. I would hope they are talking to other possible bidders, looking for a white knight (or at least an alternative) bidder. If they are genuinely confident in their numbers, especially prior year reserves which have been the recent issue, they could hold an auction by opening a data room. I doubt they will do the latter as it would require the directors to admit being in an end game, but it would make sense. I guess there will be some city boys making contact with a view to broking PE introductions and, whilst I have doubts about that possibility, there is no harm in hearing the pitch. I would be appointing advisors to sound out all these options

The game is now about securing the highest price. I have difficulty seeing how DLG can retain independence given its recent record, a decent starting offer and the obvious lack of confidence in it shown by the city.

[tuftymatt] 28/2/2024 15:59

Not right now with it trading above my average for the first time in a long time!!

Good luck all 👍🏻

[zimbtrader] 28/2/2024 15:53

IF the rejected offer was 233 and general consensus is that this isn't the end of the road for a further offer, how many of you are actually buying more DLG shares?

[laurence llewelyn binliner] 28/2/2024 14:46

So the bet comes down to holding out for a dividend reinstated, then organically we would be on our way back in to around 250 pence without a bid, IF a bid is accepted we will own AGS and get their dividend instead on a 1 newly issued AGS share for every 25.24047 DLG shares, plus a 100 pence per share cash offer to buy back the rest or take elsewhere..?

[huckers] 28/2/2024 14:38

RNS Ageas own 2.53% through State Street Global Advisors.

[boystown] 28/2/2024 14:37

233p is more or less exactly the price it was on the eve of the big profit warning and dividend cancellation of 11 January last year.

[tuftymatt] 28/2/2024 14:29

Agree 233 is too low to take but not a bad opening offer.

250 or so may see it done though and I would be a happy camper after what we have been through to take that and walk away with a nice smile.

Good luck all 👍🏻

[huckers] 28/2/2024 14:22

Agreed. I see 250p being reached organically within a short timeframe so 233p is not something to salivate over and I would be amazed if management or instituational owners are tempted. I would accept 275p now though to put the proceeds to work elsewhere.

[boystown] 28/2/2024 14:21

Yes, I recall wba1 suggesting a fair value of around 230p in 2025. So, IF you're happy to hold Ageas (and they seem reasonable value at a first quick glance) then we're there. But I imagine DLG will recommend a no to this offer anyway?

[laurence llewelyn binliner] 28/2/2024 14:09

21.03.2024 for FY2023 results (and hopes for a dividend announced), AGS clearly timed this around pre results, IF we do get a dividend reinstated our 165 pence share price would have been 200 pence PDQ and onto 250 pence for FY2024 so AGS have got in there first, IF rebuffed by the DLG BOD which I would expect, they will have to come back again a good deal higher..?

WBA1, what does your slide rule say.. :o)

[pete160] 28/2/2024 13:49

If any of you want a laugh - as I know he spouts his sh!t on many boards here too...

Posted by Porsche1946 on the LSE board at 10.22 this morning:
'I think DL is going sub a quid'

just over an hour later, rumours of a bid approach c. 230p+

lol

[tuftymatt] 28/2/2024 13:23

Nice work!!

My post this morning of 200 seeming a long time ago has spun on it's head that's for sure!!

Good luck all 👍🏻

[johnkidd1] 28/2/2024 13:21

Was awake early this morning so I lay in bed and thought I would have a scan through of the fundamentals of each stock I own. Looked at the last turnover announcement on the trading statement this month and did the maths at approx 11 pc profit margin on turnover for this year. Came out with a projected value of 250p to 280 p per share for this Yr and next so bought £11000 worth first thing. Cannot believe my luck on timing. Obviously Aegis did the maths too way ahead of me.

[jrphoenixw2] 28/2/2024 13:12

Flipping eck!
Literally 2-3hrs ago I'd just been doing some calculations re: how to 'harvest' a CGT tax-loss on DLG pre year-end to contra vs gains elsewhere in my portfolio...
How long have we waited for something like this.... years now? Fingers crossed and GLA.