One of Ageas’ top shareholders is reportedly opposing the Belgian insurer’s attempt to acquire London-listed rival Direct Line after it has already been rebuffed twice.
Sky News’ Mark Kleinman reported that one of Ageas’ top 10 investors, who declined to be named, was campaigning among shareholders against its takeover efforts, with City sources saying the investor believed the approach to be “aggressive, unsolicited and opportunistic”.
Thursday’s front page
Ageas is not proposing a shareholder vote on the deal but needs approval from investors to issue the new stock to fund a potential acquisition.
Direct Line announced on Wednesday that its board had unanimously voted to reject a second, raised takeover offer from Ageas that valued at around £3.2bn, calling it “uncertain, unattractive” and “highly opportunistic”. The offer implied a three per cent raised valuation at 237p per share.
A source close to the top 10 investor told Sky that Ageas’ interest in Direct Line was a strategic U-turn after it recently offloaded its UK commercial lines business, warning it could disrupt the Belgian firm’s strategy “following a period of very weak performance”.
The person added that the takeover bid ignored “significant headwinds” including regulatory scrutiny and claims inflation.
Ageas has until 27 March to announce a firm intention on whether to make another offer. After the first rejection, it beefed up its advisory team by hiring Deutsche Bank, although analysts still think a deal is unlikely.
Direct Line said on Wednesday that it was confident in the group’s “standalone prospects”.
The FTSE 250 company’s cost base, thought to be higher than many of its immediate rivals, is said to be a priority for new chief Adam Winslow, who only joined the firm from Aviva last week.
Direct Line swung to a pretax loss of £45m in 2022 from a £446m profit in 2021, which it pinned on market volatility, higher inflation and weather-related claims.
Ageas has until 27 March to announce a firm intention on whether to make another offer. After the first rejection, it beefed up its advisory team by hiring Deutsche Bank.
Ageas declined to comment when approached by City A.M.