Finance
UK’s Direct Line surges after rejecting Aviva’s $4.16 billion takeover offer
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(Reuters) -Shares in UK’s Direct Line Insurance soared over 36% in early trade on Thursday after it rejected a 3.28
(Reuters) -Shares in UK’s Direct Line Insurance soared over 36% in early trade on Thursday after it rejected a 3.28 billion pound ($4.16 billion) takeover offer from bigger rival Aviva, saying it “substantially undervalued” the company.
The insurer, which made the announcement after market hours on Wednesday, topped gains on the FTSE 250 mid-cap index, while Aviva’s shares fell about 3% to be the top percentage loser on the blue-chip FTSE 100 index.
Shares in Direct Line, which have fallen about 13% so far this year, surged as much as 39% to a more than eight-month high of 220 pence in early trade.
The stock is still trading below the proposed offer price of 250 pence-a-stock from Aviva.
According to British takeover rules, Aviva has until Dec. 25 to make a firm offer or walk away.
Jefferies analysts said that they believed that a higher bid might be forthcoming if Direct Line’s board considers engaging with Aviva.
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Abinaya Vijayaraghavan and Sonia Cheema)
A takeover offer is a proposal made by one company to acquire another company, typically at a specified price per share.
The FTSE 250 is a stock market index that represents the 250 largest companies listed on the London Stock Exchange, excluding the top 100.
Analysts in finance are professionals who evaluate financial data and trends to provide insights and recommendations for investment decisions.
Market capitalization is the total market value of a company's outstanding shares of stock, calculated by multiplying the share price by the total number of shares.
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