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I actually tend to agree with you. Once DLG starts paying a normalised dividend (likely 2025), the stock will be back to 275p and you can continue to collect the hefty dividend. Better to milk the cow…
Personally would rather they walked away and left DLG to become a dividend cash cow again as the bid really needs to be £3+ and many will miss the income (when it restarts).
Maybe, maybe not; DLG itself has big cash and investment balances and AGEAS will have at least two bankers it can turn to.
Ageas in an insurance company
they need certain levels of cash for their daily operations
hence they can't make a full cash offer because then they'd have to raise cash with current shareholders
that's why they're giving shares partially
Drifting up towards offer or potential for another bidder to enter, Wincanton here we come.
Onwards and upwards
I'd have thought Ageas need to get a wiggle on. Admiral results this week and DLG on the 21st are significant in the near term. Good results could prevent a further higher bid, as Ageas may conclude that an offer less likely to be recommended by the board. Conversely, poor results may encourage Ageas to improve their offer, but only by a small amount. If they are to be taken seriously and hope to aggressively grow their business in the future, a clear improvement of the offer should be made certainly before DLG results and possibly admiral's update.
I expect Ageas to make an improved offer. May well not be enough.
And whereas prior to the Ageas approach I expected no reinstatement of the dividend at prelim results, I now think they will offer something small as a promise of what's to come as the company rebuilds it's health.
Bring back the div and turn this round That will force Ageas to make a proper OFFER
Hey Abject, LSE seems happy enough to quote AGEAS and presumably deal so no worries methinks. Forget Halifax and get an account here.
I believe I read that Ageas would have to borrow more capital to raise the cash price due to their cash reserves. I would prefer a company that didn't need to borrow to take it over or wait for the annual results on the 7th to see if the dividend is reinstated
CVB , Why don’t you think they wouldn’t be able to offer no more cash ?
In a Stocks and Shares ISA, Lifetime ISA, SIPP, and Fund and Share Account, according to their website.
I’m pretty sure HL allows you to hold European stocks. If your platform doesn’t allow it, they may well sell the Ageas shares when given and credit you with the cash.
If we end up with cash and shares in a Belgian company , how will this work with brokers such as Halifax , who only offer trading in us and Uk stocks?
Personally I’m not interested in owning paper certs for a Belgian company, and would prefer to be wholly bought out rather than deal with a small holding abroad
Peter Wood seems to think there will be a number of interested parties in Direct Line. Let’s hope we see some news this week. Struggle to see Ageas being able to offer significantly more cash in a potential bid but if other large European insurers start running their rulers over DLG, I think we may end up at 300p. Risk-reward is skewed to the upside here. If the potential bid falls apart, perhaps we drift back to 180p but if a 300p comes, it will be a “winner, winner, chicken dinner”!
That’s why they historically paid a decent dividend.
Just looking at the 10-year share price total return of 4.87 % p.a. (Morningstar), he's not wrong, never mind how it's been run by management.
Agreed Alex. Ageas would like rather silly and naive if they do not come back with a better offer and an actually proper offer. Still think DLG are worth £3 as an absolute minimum in the medium term.
A takeover approach involves the expense of hiring advisors and there will be some tactics at play. A low ball first offer to psychologically anchor expectations followed by a higher offer that might just get it over the line. No one walks away after a first offer has been rebuffed. The only thing to spoil the party is a competitor bidding, in which case 300p is more than possible.
Good read, 300p would make most happy. Could it go Wincanton on us?
Section on dividend speculation
https://www.ii.co.uk/analysis-commentary/stockwatch-new-buying-opportunity-bid-target-direct-line-ii530917
I’d be very surprised if Ageas don’t increase their offer. Still won’t be enough.
Https://www.theinsurer.com/news/winslow-arrives-at-dlg-amid-expectations-for-further-takeover-bids/
Incoming CEO Adam Winslow is set to formally begin his role with Direct Line Group today amid analyst speculation that Ageas may increase its offer to acquire the listed UK personal lines insurer.