DLG slams Ageas proposal as ‘uncertain’ and ‘unattractive’

Direct Line Group (DLG) has revealed that it turned down a ”highly opportunistic” proposal from Ageas to acquire the insurer after finding it “uncertain” and “unattractive”.

Yesterday (28 February 2024), Ageas SA/NV said it was in the preliminary stages of considering a possible offer of around £3.09bn.

This would have an implied value of 233 pence per DLG share, representing a premium of 42.8% to its last closing price of 163.35 pence.

DLG said it was approached with this in the form of a ”highly conditional, non-binding indicative proposal” on 19 January 2024, which had been considered.

After reviewing this, however, DLG said it “considered it to be uncertain, unattractive and that it significantly undervalued DLG and its future prospects, while also being highly opportunistic in nature”.

“Accordingly, the board unanimously rejected the proposal on 29 January 2024,” a statement added.

“The board is confident in DLG’s standalone prospects given its strong strategic position, powerful brands and robust capital position.”

‘No action’

In its own statement, Ageas said it “firmly believes that the combination of Ageas’ and Direct Line’s UK businesses will be beneficial” for shareholders.

“This will provide a meaningful opportunity to unlock shareholder value through the delivery of significant operational and capital synergies,” the insurer added.

DLG has advised shareholders to take no action in relation to a possible offer.

This came ahead of Adam Winslow taking over as chief executive of DLG on 1 March 2024.

DLG said he had been 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”.