* Tryg would take Swedish and Norwegian businesses
* Intact to gain Canadian, UK and international operations
* Buyers would co-own RSA's Danish business
* RSA shares up 4%, Tryg down 0.5%
(Adds shares, analyst, context, advisers)
By Iain Withers and Carolyn Cohn
LONDON, Nov 18 (Reuters) - British insurer RSA is
backing a 7.2 billion pound ($9.55 billion) cash offer from
Canada's Intact Financial and Denmark's Tryg
in one of Europe's biggest financial takeover bids this year.
Insurers have become an attractive proposition since the
coronavirus crisis despite reputational damage from disputes
over business interruption claims, industry sources say.
Home-working has led to fewer claims on home and motor insurance
while commercial insurance rates have risen sharply.
RSA's directors backed the Intact-Tryg bid unanimously and
recommended that shareholders vote in favour of the consortium's
offer, the company said on Wednesday, having first flagged the
approach early this month.
Best known in Britain for its More Than brand, RSA provides
home, motor and commercial insurance and also has large
operations in Canada, Ireland and Scandinavia.
If successful, the suitors would carve up RSA between them,
the British group said. Intact would gain RSA's Canada, UK and
international operations while Tryg would take its Sweden and
Norway businesses. The pair would also co-own RSA's Danish unit.
Tryg would pay 4.2 billion pounds while Intact would
contribute 3 billion pounds, with the overall offer representing
a 51% premium to RSA's Nov. 4 closing share price of 460 pence.
"Our deep knowledge of these markets makes us ideally placed
to integrate, operate and enhance the value of our combined
group," Tryg CEO Morten Hubbe said in a statement.
KBW analysts described the deal as "transformational" for
Tryg.
CEVIAN SUPPORT
Activist investor Cevian Capital, RSA's largest shareholder,
said it fully supports the takeover.
"We assess that the long-term competitiveness of RSA's
business will benefit from combining with Tryg and Intact, the
best-performing non-life companies in their respective
geographies," said Christer Gardell, co-founder of Cevian, which
owns a 14.9% stake in RSA.
Gardell added that RSA Chief Executive Stephen Hester - a
former NatWest boss - had put the insurer on a better
footing. Since joining in 2014, Hester has shored up RSA's
balance sheet with a 773 million pound rights issue and scaled
back underperforming operations.
Industry sources said RSA had been seeking a buyer since a
5.6 billion pound bid from Zurich Insurance collapsed
in 2015.
However, the appetite for deals has been growing across the
sector. In August motor insurer Hastings agreed to be
bought by Finland's Sampo and South Africa's Rand
Merchant Investment.
RSA shares rose 3.9% to 672 pence by 0841 GMT, while Tryg
dipped by 0.5%.
Morgan Stanley advised Tryg and Barclays
advised Intact and the joint bidding company. Goldman Sachs
, Robey Warshaw and BofA Securities advised RSA.
($1 = 0.7539 pounds)
(Reporting by Iain Withers
Editing by Sinead Cruise and David Goodman)
