UK-based insurer RSA has accepted a £7.2bn bid from two overseas rivals that will break up a group whose origins go back more than 300 years.
A consortium of Canadian insurance group Intact and Denmark’s Tryg has offered 685p per share for the company, in line with the level suggested when its interest became public earlier this month.
The offer comes at a 53 per cent premium to RSA’s average share price over the three months to the start of November.
Intact is paying £3bn and will take RSA’s UK and Canadian operations, while Tryg is paying £4.2bn and will keep the Swedish and Norwegian businesses.
RSA chairman Martin Scicluna said the offer reflected “the strength and performance of RSA during a challenging period for our industry, representing a significant premium in cash”.
The offer has been supported by Cevian Capital, Europe’s biggest activist investment firm and RSA’s largest shareholder with a 15 per cent stake. Its managing partner Chris Gardell said that the bid was “good news for all RSA stakeholders”.
“The transaction follows a strategic and operational transformation of RSA under the leadership of CEO Stephen Hester,” he added. “Since Cevian’s initial investment, RSA has become more focused and profitable while its risk level and volatility have been reduced.”
When Mr Hester, the former boss of RBS and British Land, took over as chief executive of RSA in 2014, the company had uncovered big problems in its Irish business and was at a low ebb. Mr Hester set about fixing the balance sheet with a rights issue and a series of disposals, then focused on improving the performance at the remaining businesses.
Like other insurers, RSA has been hit by a variety of coronavirus-related claims and its share price had fallen from 566p at the start of the year to 460p just before the bid interest was announced.
The confirmation of the bid comes as RSA’s lawyers are at the UK Supreme Court to argue over the extent of its liability for Covid-related business interruption claims.
The RSA takeover will further thin the ranks of UK-listed general insurance companies. Many of the Lloyd’s of London insurers, such as Catlin, Amlin and Hardy, were taken over many years ago. Then in 2018 Bain Capital agreed to take Esure private and earlier this year Hastings accepted a £1.7bn bid from a consortium of South Africa’s Rand Merchant International and Finnish insurer Sampo.
RSA itself was almost bought by Zurich for £5.6bn in 2015 before the buyer pulled out after discovering problems in some of its own operations.
https://news.google.com/__i/rss/rd/articles/CBMiP2h0dHBzOi8vd3d3LmZ0LmNvbS9jb250ZW50L2U2MWU5MTI0LWQ0ODItNGVkYi05MmQ4LWE0Y2I4NDYyOTZjMdIBP2h0dHBzOi8vYW1wLmZ0LmNvbS9jb250ZW50L2U2MWU5MTI0LWQ0ODItNGVkYi05MmQ4LWE0Y2I4NDYyOTZjMQ?oc=5
2020-11-18 08:27:00Z
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