(Recasts with possible offer for company)
By Carolyn Cohn
LONDON, Nov 5 (Reuters) - RSA is in talks with a
consortium of Canadian insurer Intact Financial and
Danish insurer Tryg about a possible 7.1 billion pound
($9.3 billion) offer for the company, the British insurer said
on Thursday.
RSA said its board would be minded to recommend the
proposal for 685 pence in cash per RSA share, plus the payment
by RSA of its previously announced interim dividend of 8 pence
per share. Shares in the home, motor and commercial insurer shot
up 46% to close at 670 pence.
RSA, best known in Britain for its More Than brand, also has
large operations in Canada, Ireland and Scandinavia.
Under the terms of the deal, Intact will keep RSA's Canada
and UK & International operations, while Tryg will keep RSA's
Sweden and Norway operations. Intact and Tryg would co-own RSA's
Denmark business.
RSA appointed Christian Baltzer, a former CFO of Tryg, as
head of its Danish business last year.
The insurer has been open to offers since 2015 when a
previous offer by Zurich Insurance fell through,
industry sources say.
RSA said it received the proposal on Oct 2.
Robey Warshaw, Goldman Sachs and Bank of America are working
with RSA on the deal, the insurer said.
Rising commercial insurance rates, lower non-pandemic
related claims and a tightening up of its underwriting strategy
boosted RSA's underwriting profit in the first nine months of
2020, despite the impact of COVID-19, it said earlier on
Thursday.
RSA's combined ratio, a measure of performance in which a
level below 100% indicates a profit, stood at 90% in the third
quarter, compared with 93.6% at the end of 2019.
The insurer said it was revising down its initial estimate
of the gross impact of a September judgment in a UK test case
brought by the British markets regulator around the payment of
business interruption insurance by around 20 million pounds.
($1 = 0.7641 pounds)
(Reporting by Carolyn Cohn and Pamela Barbaglia, editing by
Mark Potter and Elaine Hardcastle)
