Ageas considers £3.1bn offer for Direct Line

Written by Adam Cadle

28/02/2024

Ageas is considering making a £3.1bn offer for Direct Line.

The Belgian insurer said today it is examining a possible offer made up of cash and its own newly issued stock, amounting to an implied value of 233p per Direct Line share, a premium of 43% to the UK group’s closing share price on Tuesday.

On the basis of Ageas’ possible offer, Direct Line shareholders would, on completion of the proposed transaction, own approximately 22% of the enlarged Ageas Group’s issued share capital.

In the medium term, the proposed transaction is expected to deliver a highly attractive return on the equity capital invested. The benefits from the proposed transaction are also expected to increase the enlarged group’s financial and strategic flexibility, underpinning its progressive dividend ambitions.

Furthermore, the financing of the proposed transaction as currently envisaged will allow Ageas to maintain a robust Solvency II position above Ageas’ risk appetite levels and sound leverage ratios. The adoption of a group-wide non-life PIM (Partial Internal Model) is expected to generate enhanced capital efficiencies.

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