Aviva explains how it plans to purchase DLG after takeover bid accepted

Aviva has explained how it plans to purchase Direct Line Group (DLG) after having its takeover proposal accepted.

Today (6 December 2024), the two firms reached a preliminary agreement on the financial terms for a potential acquisition.

The offer represents a total consideration of 275 pence per share, which equals a valuation of £3.6bn.

The DLG board said it had “carefully considered the proposal” from Aviva and that it was minded to recommend to shareholders that they accept a formal offer.

Offer breakdown

Aviva said that should it put in a firm proposal, its offer would be delivered as 129.7 pence per DLG share in cash, funded through Aviva’s internally available cash resources, and 0.2867 new Aviva shares per DLG share.

There would also be dividend payments of up to five pence per DLG share in aggregate to be paid prior to completion.

A statement added: “Direct Line shareholders would own approximately 12.5% of the issued and to be issued share capital of Aviva.

“The Direct Line board believes that, in addition to the attractive headline value per share, the combination would provide the opportunity to deliver significant synergies, creating substantial additional value for both sets of shareholders.”