Last checked at 
(Alliance News) - Direct Line Insurance Group PLC on Wednesday said it had rejected a modestly improved new takeover approach from Belgian insurance group Ageas SA.
The Bromley, England-based motor and home insurer said the latest proposal, received on Saturday, comprised 120 pence in cash and one new Ageas share for every 28.4 Direct Line share.
At the closing share price last Friday, the day before the proposal was received, this implied a value of 237p per Direct Line share. The offer would value all of Direct Line around GBP3.07 billion.
Late February, Ageas made an initial approach with an implied a value of 233p per Direct Line share and 231p currently, so the new offer represents a 2.6% improvement.
In response, shares in Direct Line fell 6.4% to 211.80p each in London on Wednesday.
Shares in Ageas were up 0.9% to EUR39.91 each in Brussels.
Direct Line described the Ageas proposal as "uncertain" and "unattractive", and said it "significantly undervalues" Direct Line and its future prospects.
Direct Line said it was "confident" in its stand alone prospects.
The insurer will release its 2023 results on Thursday next week, when it will provide an update on further initiatives to build on the operational improvements implemented during 2023.
On Saturday, the Times newspaper said new Chief Executive Adam Winslow intends to announce plans to rein in costs and boost profitability alongside the results.
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 Direct Line, Churchill and Privilege, which sells through price comparison websites, the Times said.
The business also owns the Green Flag recovery service for drivers.
Winslow, who joined from Aviva PLC, took up the role as chief executive on March 1.
He is tasked with refreshing the strategy and operational focus of the group with the clear objective of returning to a sustainable level of operating profit over time.
By Jeremy Cutler, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2024 Alliance News Ltd. All Rights Reserved.
