13 March 2024 , 11:34
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UK insurance giant Direct Line has seen its share price dip after turning down an increased takeover bid from Belgian company Ageas.
Direct Line's shares went down by 6% during Wednesday morning trading after it announced it had turned down a second proposal from Ageas on 9th March, offering 237p per share. This valued the company at about £3.11 billion.
This is a 3% increase on the first offer of 231p per share made at the end of last month, which was worth around £3.1 billion. Direct Line remarked: "The board considered the latest proposal with its advisers and continues to believe the latest proposal is uncertain, unattractive, and that it significantly undervalues Direct Line Group and its future prospects while also being highly opportunistic in nature. Accordingly, the board unanimously rejected the latest proposal."
Ageas now has until 5pm on 27th March to make a concrete offer or withdraw according to the City Takeover Panel rules. Direct Line said it remains "confident" in the firm's ability to succeed as a standalone business.
"Direct Line Group will release its 2023 preliminary results on Thursday 21 March 2024 and will also then provide an update on further initiatives to build on the operational improvements implemented during 2023," they explained.
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International insurance group Ageas, which mainly covers Europe and Asia, argued that buying Direct Line would create a strong UK business focusing on home and car insurance. The company mentioned last month when they first made their offer that they see a "strong potential" in personal insurance, which is for people not companies.
They also said that the number of insurance claims has stayed about the same in the past year.