RE: Sunday Times10 Mar 2024 10:14
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.
Advertisement
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.
Sign In
Follow the stocks
