LONDON (dpa-AFX) - Direct Line Insurance Group plc (DLG.L) Friday announced that it has reached preliminary agreement on the financial terms to be acquired by general insurance company Aviva plc (AV, AV.L) for 275 pence per Direct Line share in cash and stock deal.
The deal price will be delivered as 129.7 pence per Direct Line share in cash, funded through Aviva's internally available cash resources; and 0.2867 new Aviva shares per Direct Line share.
The deal also includes dividend payments of up to 5 pence per Direct Line share in aggregate, to be paid prior to completion subject to the approval of the Board of Direct Line.
The consideration is based on Aviva's last closing share price before the offer period started, being 489.3 pence per Aviva share.
The company noted that the per share price represents a premium of 73.3 percent to the closing Direct Line share price on November 27, being the last closing share price before the offer period commenced.
Following a deal, Direct Line shareholders would own around 12.5 percent stake in Aviva.
Direct Line Insurance in late November had rejected a previous offer by Aviva with a value of 250 pence per Direct Line Group share, comprising 112.5 pence in cash and 0.282 new Aviva shares.
Direct Line now said its Board has concluded that the latest proposal is at a value that it would be minded to recommend to Direct Line shareholders should a firm intention to make an offer be announced on such financial terms.
Direct Line Board expects that the combination would provide the opportunity to deliver significant synergies, while Aviva believes in the strong strategic and financial logic for a combination of Direct Line.
Direct Line added that its Board remains confident in its prospects as a standalone company and continues to have conviction in the capabilities of the newly established leadership team to deliver the announced strategy.
Copyright(c) 2024 RTTNews.com. All Rights Reserved
Copyright RTT News/dpa-AFX
© 2024 AFX News
