Zurich proposes £5.6bn offer for RSA

Zurich has proposed a possible all-cash offer of 550p a share for RSA.

Based on the 1.02bn shares RSA has in issue, the proposed offer would value the company at around £5.6bn, a premium to RSA’s current market value of £5bn.

Under the terms of the proposed offer, RSA shareholders retain the right to receive the 3.5p interim dividend RSA announced on 6 August.

RSA said its board had told Zurich that it was willing to recommend the possible offer to RSA shareholders, subject to the satisfactory resolution of the other terms

RSA said its board is in discussions with Zurich about these terms.

Shore Capital analyst Eamonn Flanagan said a deal now seemed “inevitable”. He said: “We expect RSA’s shares to respond favourably this morning.”

Deadline extension

RSA has also agreed to extend the deadline for Zurich to announce a firm intention to make an offer under the City Code on Takeovers and Mergers.

Zurich now has until 5pm on 22 September, which RSA said was to enable the parties to conclude their discussions.

The original deadline was 5pm today.

RSA said the deadline may be extended further, with consent of the Takeover Panel.

Zurich can make an offer less than the proposed 550p a share if:

• The RSA board agrees.
• If another company announces a firm intention to offer less than 550p a share for RSA
• If RSA announces a whitewash transaction pursuant to the City Code.

RSA added that there can be no certainty that any firm offer will be made.