Business, Currencies, Commodities, Retail industry Business | The Guardian
Direct Line, which owns Churchill and Green Flag brands, rejected approachDirect Line shares jumped as much as 38%, after news last night that Aviva has swooped on it with a takeover approach – which Direct Line has rejected.Meanwhile, Aviva shares have fallen by 2.7% at the open, making the UK’s largest insurer one of the biggest losers on the FTSE 100 index this morning.We believe that an offer at around 250p per share or slightly above is good for Direct Line shareholders.The offer represents a 60% premium to Direct Line’s shares on 18 Nov. Or 57.5% premium to close yesterday.The Competition and Markets Authority will have a view on the combined group BUT we assume that Aviva have considered this and have discounted it as being an issue. We understand that the combined motor market share would be less than Admiral’s but in home, where Aviva has a market share of 12%, the combined group would be No.1.No cost savings/ synergies have been disclosed but we assume at least 10% as being a likely figure. Aviva have stated that cost synergies will be in excess of the £100m cost savings that Direct Line have previously identified itself.There was little shift in consumer confidence since the chancellor’s budget, with many worried about the economy in the lead up to Christmas. While there was a very slight improvement in people’s expectations of their personal financial situation, this was offset by declining expectations of the wider economy.Personal retail spending remained positive, edging up slightly, though this was to be expected as consumers prepare for the festive season. Within this, non-food spending expectations remained low, though expectations of spending on eating out improved the most out of all categories, as people prepare for Christmas catchups with friends and relatives. Continue reading…
Direct Line, which owns Churchill and Green Flag brands, rejected approach
Direct Line shares jumped as much as 38%, after news last night that Aviva has swooped on it with a takeover approach – which Direct Line has rejected.
Meanwhile, Aviva shares have fallen by 2.7% at the open, making the UK’s largest insurer one of the biggest losers on the FTSE 100 index this morning.
We believe that an offer at around 250p per share or slightly above is good for Direct Line shareholders.
The offer represents a 60% premium to Direct Line’s shares on 18 Nov. Or 57.5% premium to close yesterday.
The Competition and Markets Authority will have a view on the combined group BUT we assume that Aviva have considered this and have discounted it as being an issue. We understand that the combined motor market share would be less than Admiral’s but in home, where Aviva has a market share of 12%, the combined group would be No.1.
No cost savings/ synergies have been disclosed but we assume at least 10% as being a likely figure. Aviva have stated that cost synergies will be in excess of the £100m cost savings that Direct Line have previously identified itself.
There was little shift in consumer confidence since the chancellor’s budget, with many worried about the economy in the lead up to Christmas. While there was a very slight improvement in people’s expectations of their personal financial situation, this was offset by declining expectations of the wider economy.
Personal retail spending remained positive, edging up slightly, though this was to be expected as consumers prepare for the festive season. Within this, non-food spending expectations remained low, though expectations of spending on eating out improved the most out of all categories, as people prepare for Christmas catchups with friends and relatives.
