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McCormick / Premier Foods would be the counter example. McCormick offered 55p a few years ago for PFD which was rejected. Stock sank back to 30p but is now at 155p with management actions and Covid helping the business.
I tend to agree with you - a knock out 300p bid and I’m taking my chips off the table. Do not trust to hope for they have forsaken these lands.
Can onlty be a good thing
Red alert: with a predator on the prowl, the insurance brand is under pressure to cut costs and boost profitability
Direct Line boss beefs up defences after Ageas bid
New chief Adam Winslow set to move quickly on turnaround plans at troubled insurer following £3.1 billion approach from its Belgian rival
Sunday March 10 2024, 12.01am
Adam Winslow, the new boss of Direct Line, is expected to bring forward some of his plans for turning round the troubled insurer as he fends off a £3.1 billion takeover bid from Belgian rival Ageas.
The former Aviva executive arrived at Direct Line a week ago, just days after news of the unwanted takeover approach. The cash-and-shares offer valued the company at about 233p a share and boosted the flagging share price of Direct Line by about a third. It closed on Friday at 223.7p.
Most new chief executives would take months to set out their turnaround plans for a business, but Winslow is expected to indicate ambitions to rein in costs and boost profitability when he announces Direct Line’s financial on March 21.
Adam Winslow only took the helm at Direct Line a week ago, but now he is having to shore up its defences
Adam Winslow only took the helm at Direct Line a week ago, but now he is having to shore up its defences
Investors are waiting to see whether he can restart the dividend payments that were stopped in January 2023 — a move, along with a profit warning, that led to the exit of Penny James. For the past year, the insurer has been run by stand-in boss Jon Greenwood.
Winslow is expected to have to scrutinise the cost base of the insurer, which is widely seen as being higher than rivals, and look at ways to differentiate its brands — which include the eponymous Direct Line, Churchill and Privilege, which sells through price comparison websites. The business also owns the Green Flag recovery service for drivers.
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Analysts at investment bank Jefferies calculate that the bid price of 233p a share would need to be raised to between 270p and 300p to stand more chance of success. They suggest the Belgian insurer could add at least £500 million to the £1.3 billion cash component of the offer. Ageas has until March 27 — six days after Direct Line’s results — to make another offer.
Direct Line refused to comment.
Personally I’d accept an offer north of 275p. I’d reinvest the money rather than gamble on turnaround plans.
On a personal level, I would love to see a credible plan to get us to 400p in 3-5 years with some dividends along the way.
Https://www.thetimes.co.uk/article/2eef76f1-2960-4f5f-8d0b-358b3b096788?shareToken=24e704bc52ba1a298d99421f3af65230
I think DLG resumes a small dividend albeit for probably the wrong reasons. The challenge Winslow faces is the turnaround he envisages will take a couple of years and involve some investment. At the end of the turnaround there is a good chance we are looking at 275-300p with a dividend yield of about 5%. Can he show us a path for this stock to be worth 400p over a 3-5 year horizon? This is more difficult especially with the asset sale last year but it is what he needs to do for investors to stay on board in my view.
I hope they do but it won't be the be all and end all if they don't as long as the dividned is on track to return in FY24; after the FY22 problems I'm inclined to be conservative (but quite happ to be proven wrong).
I would think they’ll pay a small divi
The concensus by Nasdaq and marketscreener is that DLG will be paying dividend payout this year.
The concensus has been updated twice this yr from 7p to 13p; 2021 they paid out 22.7p.
Gulfharbour, I think you'll find that the £520m sales proceeds are earmarked to enhance the capital strength of the Group and improve its solvency ratio, not pay an FY23 dividend.
Whether they restart dividends is dependent on two conditions being met. First, an improvement in the capital coverage at the upper end of their agreed range (I think they targeted 180%) and secondly, a return to organic capital generation in the motor line. The first condition should have been met as a result of the £520m sale of their commercial lines business but it was still unclear at the H1 results whether the second condition would be met in FY23 (there were still some losses coming through from FY22 and prior years). The general expectation is that the second condition should be met in FY24, if not FY23.
It’s interesting that Sir Peter Wood, who founded Direct Line, thinks that the company has been terribly managed for years. I totally agree with him. What bugs me is that the management pay themselves fancy salaries for doing a rotten job. As soon as this company is taken over and run properly the better.
I definitely believe we will get a div announcement at next res.
Remember that there is the £520m proceeds from the sale of the brokered commercial business that were earmarked to be used for a 10p April div.
Re divi
If reinstated ,I presume it will be low pennies.
A decent bid north of 250p ,get me some decent profit then out.
To the best of my knowledge Ageas hold a fraction over 2.5% of DLG.
DLG is a dividend stock, so restoring confidence involves showing a clear path back to dividend distribution.
Shareholders are likely to sell should Ageas (or another) make an offer north of 270p. Given that Ageas have hired additional advisors a new offer seems likely, in my view. Direct Line management have failed shareholders in recent years, so I’m not sure how persuaded to remain loyal they will be should an acceptable offer land on the table? Anyway, it will be interesting to see how this ends.
I would imagine that it is unlikely, HAMMY69. At this stage, under a new CE and with Ageas contemplating a bid for the company, restoring the dividend will not be high up the agenda. A more prudent approach, to restore confidence amongst shareholders, is the likely path near term.
Has anyone got an opinion on wether a dividend will be announced on the 21st March with the update?
I think as long as "controller" isn't a possible take over party, than the filer just files in relation to the possible take over bid of ageas on direct line. But these filings are indeed very hard to read.
Sorry if I'm being a bit dull but does anybody actually know what interest Ageas (and its associates) now has in DLG? Initially I thought I could follow all of these Form 8.3s and 8.5s but as the days have past it's just become confusing. It doesn't help that some of the disclosers seem to have as much clue how to complete the forms as I have reading them!
E.g. in today's Form 8.3 disclosure from Norge Bank, are they disclosing the number of shares (relevant securities) that they now own hold in Ageas (Box 1c) or DLG (Box 1f). If Norge Bank are disclosing the number of shares they now hold in Ageas, I guess the information might be of use to DLG should Ageas's bid becomes hostile but it just makes matters very confusing.
Also, why is everybody carrying on as if Ageas has submitted a formal offer for DLG? They haven't. They've wrtitten to DLG with an indicative offer (to see if the BoD would be interested in recommending it to shareholders) and it's been rejected. As things currently stand, there is no offer.
It's like a person walking into a grocer's and saying I'll give you a quid for that box of spuds, the grocer saying "not on your nelly", the person then walking back out of the grocer's and then sending in their their kids (their "covert operatives") back into the grocer's to try and buy the spuds one at a time!
I don’t want Belgian shares.
I want direct line shares
I want dividends
I want to use the dividends on BELGIAN CHOCOLATES
TheTrotsky. Thank you for your posts. Read with interest :-)
"The BoD (and shareholders) in what Ageas has tabled thus far"
Should have read "The BoD (and shareholders) ARE NOT INTERESTED in what Ageas has tabled thus far.
I'm saying Winslow should ignore the potential offer. If a better (winning) offer should materialise so be it (he'll be well compensated in any event). Winslow should not be in the business of dressing up the results or restarting the dividend before time just to try and force Ageas (or A N Other) to submit a better formal offer. The BoD (and shareholders) in what Ageas has tabled thus far. The ball is in Ageas's court. Personally, I'm not sure that Ageas has got the financial means to get a bid over the line (it's got to substantially improve the cash element of any formal bid for starters) but it's come too far not to submit a formal bid (which would have to be north of £2.50 for starters to be even considered credible).
More info regards advisors.
https://uk.finance.yahoo.com/news/exclusive-ageas-presses-direct-line-123150037.html
By Pablo Mayo Cerqueiro and Amy-Jo Crowley
LONDON (Reuters) - Belgian insurer Ageas is pressing on with a potential takeover offer for Britain's Direct Line (LON:DLGD), bringing in a new adviser to assist with the efforts, three sources familiar with the matter told Reuters.
Ageas has lined up Deutsche Bank (ETR:DBKGn) to work alongside its existing financial adviser Bank of America (NYSE:BAC), two of the sources said. It interviewed banks for additional support since making its offer public last week, the third one added.
Ageas might sweeten the terms of its initial bid to win over Direct Line's leadership, two of the sources said.
Ageas declined to comment, and has until March 27 to launch a formal offer or walk away under UK takeover rules. Deutsche Bank and Direct Line declined to comment.