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RSA receives takeover offer from consortium
Posted on Friday, 06 November 2020 12:17
Tryg and Intact Financial have made a joint cash bid to acquire UK-based insurer RSA in a deal that could be worth up to GBP 7.20 billion.
The announcement filed with the London Stock Exchange follows earlier media reports that suggested a takeover offer had been tabled.
Under the terms of the proposal, the consortium is offering 685.00 pence per share, plus payment by RSA of the announced interim dividend of 8.00 pence apiece.
The offer represents a premium of 49.0 per cent to the target’s close of 459.70 pence on 4th November 2020, the last trading day prior to the announcement.
Shares rose 45.7 per cent to 670.00 pence following the statement by RSA.
Intact will contribute around GBP 3.00 billion of the total price, while Tryg will pay roughly GBP 4.20 billion.
The former is said to retain the group’s Canadian and UK and international operations, while the latter will take on RSA’s Swedish and Norwegian business.
They would together control the Denmark-based unit.
A deal remains subject to a number of pre-conditions, including due diligence and board approval.
The acquisition of RSA would strengthen Intact’s position as a world-class property and casualty (p&c) cover provider and increase its total direct premiums from CAD 12.00 billion (GBP 7.02 billion) to CAD 20.00 billion.
On the other hand, Tryg believes the addition of the Swedish and Norwegian arms will allow the acquiror to break into the top three p&c insurance providers in these countries.
Following closing, this buyer would become the largest listed P&C insurer in Scandinavia with gross premiums earned of DKK 31.00 billion (GBP 3.76 billion) and total assets of DKK 99.00 billion.
RSA is a multinational quoted insurance group with around 12,400 employees with net written premiums of GBP 3.14 billion in the six months to 30th June 2020.
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