Shares react to Aviva’s increased bid for Direct Line
Direct Line shares climbed almost 8% following news that it is set to be acquired by fellow British insurer Aviva.
Direct Lines shares were 7.71% higher at 8:16 a.m. London time, hitting a 52-week high, while Aviva stock rose 0.35%.
Direct Line’s board on Friday said it would recommend a formal takeover offer from Aviva to shareholders, after the latter increased its bid for the company by 10%.
Direct Line
The new offer values Direct Line at 275 British pence ($3.51) per share, representing a more-than 73% premium to the closing price on Nov. 27 — the day before news of the initial bid became public.
— Katrina Bishop
Aviva to takeover Direct Line
Direct Line looks set to be acquired by Aviva after the latter increased its bid for its fellow British insurance company.
In a joint statement, the companies said they had reached a preliminary agreement on the terms of a takeover. Direct Line’s board said it would recommend the deal to shareholders if Aviva made a formal offer.
The new offer values Direct Line at 275 British pence ($3.51) per share, representing a more-than 73% premium to the closing price on Nov. 27 — the day before news of the initial bid became public. It represents a 10% increase from Aviva’s initial offer of 250 pence per share in November, which was rejected.
“Direct Line shareholders would own approximately 12.5% of the issued and to be issued share capital of Aviva,” the companies said in a statement.
“The Direct Line Board believes that, in addition to the attractive headline value per share, the combination would provide the opportunity to deliver significant synergies, creating substantial additional value for both sets of shareholders.”
— Katrina Bishop
Opening calls
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