Direct Line accepts £3.6bn takeover offer from rival Aviva in move that will create home and car insurance giant
DIRECT LINE has accepted a £3.6billion takeover offer from rival Aviva in a move that will create a home and car insurance giant.
Aviva sweetened its bid to 275p-a-share yesterday after two previous offers were rejected.
Its first gambit at 250p-a-share had been dismissed by Direct Line’s board as “opportunistic”.
However, investors and analysts believed Direct Line would be under pressure to submit to a swoop, as a turnaround of the struggling insurer came with risks and would require patience.
The takeover cuts short new boss Adam Winslow’s overhaul efforts, after he only joined in March from Aviva, which is now buying the business he moved to.
The 45-year-old has 516,175 shares in Direct Line which will be worth £1.5million at the takeover price.
read more on business
He has a further 2 million shares, worth another £5.5million from the Aviva deal, which were awarded, ironically, when he forfeited awards from his previous employer.
As one wag on social media said: “He won’t need to worry about his car insurance renewal going up”.
A takeover will make Aviva stronger in car insurance, with Direct Line the UK’s second biggest provider of motorist premiums behind Admiral.
It will also give the combined business 15 per cent share of the home insurance market.
Most read in Business
Analysts expect it will have to go through regulator and Bank of England approvals.
WATER BIDDER
TROUBLED Thames Water has received a bid from Scottish utility firm Castle Water.
It is owned by Tory party treasurer Graham Edwards and infrastructure investor Covaliz — and supported by France’s Suez.
Thames Water has warned it could run out of cash next year.
£298K HOUSE
THE average UK house price hit a new record high of £298,083 in November, according to Halifax.
Property values rose by 1.3 per cent compared to the previous month — the fifth increase in a row.
The lender’s mortgage chief, Amanda Bryden, predicted “prices will keep rising gradually next year.”
Good week: Stuart Machin, boss of M&S, after winning a battle to demolish and rebuild its asbestos-ridden Marble Arch store.
Bad week: Frasers Group chief Michael Murray who lowered profit forecasts after the “punch in the face” Budget.