Rsa Insurance Group Ld Share Discussion Threads

[fangorn2] 03/1/2014 10:17

Fatken,

50p - that'd be some discount to the current market price implying they'd be struggling to get the financing away. Shouldn't need more than a 25%-30% discount at worst.

Sale looks more likely. Zurich or Prudential in my view. Aviva still in rationalisation mode. L&G, doubtful. Perhaps a Chinese firm from left field looking to boost Insurance biz profile on the cheap.

[montyhedge] 03/1/2014 08:10

No rights issue, fund managers want a sale, Zurich is favourite. Talk of 118p.

[fatken] 03/1/2014 06:54

Just done some back of envelope calculation. If RSA decides to do a rights issue (and it is not a certainty by any means), there are appro 3.7 billion shares. To issue 1 new share for every 2 existing shares at 50p will get 925 millions new capital. As an existing shareholder, I am tempted to subscribe any new shares at an attractive discount. Don't forget RSA did plan to raise capitals in 2010 before abandoning it, I am sure that plan is still on the shelf, so they and their advisers don't have to start from the scratch.

The other priority is to appoint a CEO ASAP - Pat Regan, who is the current CFO at Aviva, may be a possibility after missing out the chance to get the top job last year.

[kiwi2007] 02/1/2014 22:28

FATKEN... The market seems pretty sure that things won't drag on until 27/02 and will be sorted (one way or another) before the end of January.

If a bid does not come before then I can't imagine what would hold the price up at these levels once a sale of the better bits or a RI is announced. Once either of those are organised a bid will be off the cards. All IMO of course.

[wllmherk] 02/1/2014 17:21

interesting view FATKEN. Where I would differ is regarding any opportunistic bid. Most shareholders including the big institutions are likely to hold shares above NAV, ie 99p. How many would accept a bid at that sort of level, not many me thinks ?

wllm

[fatken] 02/1/2014 14:46

Bearing in mind that the NAV was 99p at the time of IMS (and before the injection of £135 million to its Irish business), I don't share others' view that an opportunistic bid will come at a huge premium to the latest NAV. Selling assets at a distressed level may help to support the share price in the short term, at the expense of any potential medium/long term earning growth. In my view, the least bad option is to do a rights issue - if it is done at an attractive discount, it is not difficult to get hold of 800 million to 1.2 billion to get through the current crisis. As long as you subcribe to the rights issue, your share holding will not be diluted.
In term of timing, they really need to get the Irish review completed and publisised in the next few weeks and announce the details of the RI on or before the 27th Feb.

[montyhedge] 02/1/2014 08:56

No RI, fund managers had enough, an outright sale is on the cards. Zurich is No 1.
125p cash will do.

[wllmherk] 02/1/2014 00:23

diku,
I would assume they would invite bids and take from there. A RI will see the share price tank and dilute current shareholders holdings. As a shareholder I know which option I prefer,

wllm

[diku] 01/1/2014 23:49

wllmherk....Selling some parts of the company to avoid RI would come across as a distressed seller...would the buyer be willing to pay a good price?...

[wllmherk] 01/1/2014 21:34

thx Michael.

wllm

[wllmherk] 01/1/2014 21:34

thx Michael.

wllm

[michaelmouse] 01/1/2014 16:09

hxxp://michae1mouse.blogspot.co.uk/2014/01/barratt-developments-rsa-group-and.html

A few thoughts.

Michael.

[wllmherk] 01/1/2014 12:23

Going to be a very interesting few months for RSA and I await the company's results on 27th Feb with some trepidation. A rights issue would be the worst outcome for me personally as I don't have any spare ammo to buy more shares. My second biggest holding behind RSA is DEB so no joy there either.
The dividend is almost certainly going to be cut or passed altogether, however, as long as RSA survives, which I've no doubt it will, then I can wait as long as necessary. Do others hold an opinion on the likelihood of a RI, I'm sure I read that current CEO wants to avoid this so selling some parts of the company seems more likely to shore up their finances ?

wllm

[diku] 30/12/2013 23:44

After Monty has sold out....

[montyhedge] 30/12/2013 08:23

Zurich will make a move, and nick the company cheap.

[olderandwiserone] 30/12/2013 07:46

Topvest, well you certainly don't know the future. Is this what you said about Renew back in April?

"I looked at Renew a while back. It's a price competitive commodity business. Best avoided unless timing is your game if you ask me. Construction companies always go pear shaped at some stage."

Well played, sir.

[dr biotech] 29/12/2013 13:21

RSA tipped in the torygraph today as one of its tips of the year. Admits its a risk though.

[dope007] 29/12/2013 11:13

Because it is overvalued Wilm in my view. The Central banks have printed us up to here. Debt is at records across the world and interest rates have started to rise on bonds. IF bonds rise to far then shares will fall and debts will again see rising defaults.

Gutterhead if large shareholders let it be known they want a takeover, or divestments, then that is what will happen. The price however?

[gutterhead] 28/12/2013 21:25

Wllm
Save your breath. Rsa is not in a fire sale. It will still make a substantial profit and pay a dividend. It doesn't have to sell, won't want to sell. The major investors have lost patience and would like rsa to sell but even then they won't want a below nav sale as it won't give them the return they need.
Regards
Gh

[topvest] 28/12/2013 21:23

It will be certainly interesting to see what happens to RSA. They are very exposed to a bid at the moment, for a group with sufficient firepower to gobble them up. The business has not been run that well, so there must be potential amongst the slightly stretched balance sheet and good brands.

[topvest] 28/12/2013 21:21

Anyone who says where markets will be at the end of 2014 is just guessing...none of us know. There is certainly a risk of a big correction at some point, but when that will be is anyone's guess. I would be more pessimistic than optimistic taking a contrary view, but that doesn't mean I'm selling my shares.

[wllmherk] 28/12/2013 18:54

Dope,

Why do you think the market will finish lower next year. Most financial analysts suggest the uk economy is growing, as is the US and even the so called PIIGS are showing some strength ?

wllm

[dope007] 28/12/2013 18:31

Uppompeii. When a company is in a position of weakness then NAV for me is firesale. When it is a position of strength then premiums to NAV are paid due to brand strength. Looks to me though like the market will finish lower in 2014 than it finishes 2013 at

[uppompeii] 28/12/2013 16:33

Dope - do you see NAV as including "goodwill" eg brands etc or just the firesale value of the assets? Do you see a brand as part of the NAV?
I know we've talked about this on the Av. thread but I still think you place too great an emphasis on it.

[gutterhead] 28/12/2013 16:03

It varies and as you know nav is always variable for every company, some recently say its 113p but this does not take into account the value in its brands.
Most pundits are variable in their tips and get wrong as much as right.
I'm not bothered whether you believe it or not