Direct Line Insurance Share Discussion Threads

[tuftymatt] 01/3/2024 09:14

I think they wait.

They know where they roughly need to be and that can be confirmed sort of following the results so why act sooner. They need to borrow too in order to pull this off so doing so on the back of the latest public figures makes sense.

In the background they will be getting their ducks in a row then along will come the revised bid later this month I think.

Good luck all 👍🏻

[nellynell] 01/3/2024 08:46

Well results are due on 21st March and Ageas has until the 27th March to put in a offer. Question is will Ageas wait until after the results or will they make a move before?

[elbrus55] 01/3/2024 08:23

When there is a bid situation it triggers very stringent rules requiring large shareholders to report every change in their shareholding without delay.

[theinquisitiveone] 01/3/2024 08:18

If there's a demented downticker on a thread, that downticks EVERYTHING including the good posts, you can be fairly sure Neilyb675 won't be far away :-))

[carpingtris] 01/3/2024 08:16

likely a bot as happens across lots of threads, that or someone with too much time on there hands.

[nellynell] 01/3/2024 08:16

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,” 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.”

[nellynell] 01/3/2024 08:10

Lol think there's a very unhappy shorter on the board marking down all the posts hahaha

[carpingtris] 01/3/2024 07:52

Anyone any clue as to what all the form RNS are about? TIA

[jrphoenixw2] 29/2/2024 19:52

OIC your thinking, yes you might have a point!

point#2, there are a darn lot more F1 trackers than F2. So getting promoted, aside from 'the rest', triggers much compulsory buying.

[elbrus55] 29/2/2024 19:00

I think it it updated in real time,.but as the FTSE review was on 28 February they may have deliberately frozen it as at close on 27 February.I am not sure that FTSE100 versus FTSE250 makes all that much difference to anything.

[jrphoenixw2] 29/2/2024 16:55

Thinking back to when some of us were discussing what the odds were of DLG getting promoted into the FTSE100... Seems a looong time ago now. Well it got within the top 5 or so of the FTSE250 (AFAIR) but no further.
I thought I'd check again today on a website that incorporates the FTSE350 ranking by £Capitalisation. Click the FTSE Ranking tab. This table is someones long time side-project so the timing can be a bit variable for how often it's updated. However it is updated at least weekly. Today it shows figures from the close of Tuesday/27-Feb with the cob px of 163.35p. It's ranking is #146.

I'm curious to see where it ranks given the shift yesterday. I'm also wondering if another FTSE250 insurer was doing the offer to buy-out.... whether the successful result would catapult them together into the FTSE100 and hence get the turbo-boost premium that comes from FTSE100 ranking and index-funds mandatory buying...

Ah well, we can all have our dreams eh? :)

[jubberjim] 29/2/2024 16:44

I hope when the new person in charge takes up the post he swings the axe

How do you sit on the fact that a company has declared an interest in buying the company and sit on that fact while the share price craters

If the news had been put in the public domain does one not think that the share price would not have suffered to the extent it had been doing and the company and the investors might have benefited from a higher initial offer from an interested party.

Some hard questions need to be asked and those culpable should be put out to grass

Smacks of gross incompetence or wilful collusion

I ve made up my mind !

[elbrus55] 29/2/2024 16:07

The dividend is an indirect way of looking at this.What the Company really needs to do is to correctly price/underwrite insurance business. They've been really bad this in recent years - even compared to Aviva.It doesn't matter who owns the Company... this is always the answer.Yes, good pricing/underwriting will eventually lead to higher dividends.

[jubberjim] 29/2/2024 15:44

Nothing doing until the results are out

Gone are the days of BSD s


Nervous markets

No real ideas no leadership

Splinters from sitting on fence can be salved!

Staying out

Will sell at 270

Put me out of my misery. PLEASE

[huckers] 29/2/2024 15:32

Good question!

[carpingtris] 29/2/2024 15:30

What are all the RNS disclosures about??
Has Ageas increased any holding?

[alex1621] 29/2/2024 14:01

I was thinking that perhaps the dividend will be reinstated in the next update, even if they weren't originally planning to. The pressure is now on the Board and new CEO to prove that the company is worth considerably more. Stalling on the dividend might encourage institutions to be more willing to listen to suitors.

[pete160] 29/2/2024 13:34

At least having a potential bidder in the wings should stop the new ceo from kitchen sinking things when he arrives.
It might also encourage dlg to restart a (albeit modest) dividend?

If this interested party does not come back with an offer at a higher level (they surely will) there will be plenty of others who have run the rule over dlg and who must put up our shut up in the next few months.

Dlg is definitely now in play and in my view will not be plc listed by this time next year.
That said, i do find it is quite odd that the market is not higher than it is.

[tuftymatt] 29/2/2024 13:18

Thanks wba1 👍🏻

[wba1] 29/2/2024 13:12

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.

[blackhorse23] 29/2/2024 13:09

Out with profit & going to reinvest in GNC [LSE]

[tuftymatt] 29/2/2024 12:25

Interesting thoughts from Jefferies but I do find the last line somewhat strange after all that.

Good luck all 👍🏻

[nellynell] 29/2/2024 11:35

Belgium's Ageas would need to make an offer of 270p to 300p a share for UK insurer Direct Line for it to be more likely to be accepted, Jefferies said in a note on Thursday.

Direct Line confirmed on Wednesday that it had rejected a £3.1bn takeover approach from Ageas, saying it "significantly" undervalued the group.

The terms of the "highly conditional, non-binding indicative proposal" comprised 100p in cash and one new Ageas share for every 25.24 Direct Line shares. As at closing on Tuesday, this implied a value of 233p per share.

Jefferies said the 270p to 300p a share range would be more in line with recent M&A valuations in the sector.

"We believe such a deal could be a good strategic fit and would be likely to deliver material synergies, whilst not being problematic from a regulatory point of view," the bank said.

Based on its forecasts, Jefferies said a 233p share price implies a 10.6x 2025F price-to-earnings multiple, which would be a discount to recent UK personal lines insurance deals. It noted that Bain acquired Esure in 2018 at a circa 12x one-year forward P/E multiple, while Sampo bought Hastings at around 14x.

"Thus, a proposal would more likely be accepted if the valuation were greater than 270p, implying a 12x 2025F P/E multiple," it said.

Mulling the prospects of a potential higher offer from Ageas, Jefferies said a 270p to 300p price would imply that the Belgian firm would need to raise a further £0.5bn-£0.9bn in cash.

"This would likely need to be largely funded with new debt, since Ageas guided to having €350m of cash available for investments in 2024 in its results presentation this morning," it said. "We note that Ageas's current financial leverage is 18.3%, so there is sufficient capacity to raise further debt, in our view."

Jefferies rates Direct Line at 'buy' with a 210p price target.

[alex1621] 29/2/2024 10:00

It's a tactic. I have seen it mentioned in articles before. Shrewd for the bidder, opportunistic for the target, as they believe the company is worth a great deal more in time. DLG screwed up in 2022, the dividend cancellation a disaster, and the market punishes to the extreme.

[boystown] 29/2/2024 09:52

I don't really understand why the word "opportunistic" is pejorative. It coud be called "a shrewd move" etc. Remember, these were 130p not long ago.