(Bloomberg) — Aviva Plc reached a preliminary agreement on terms to acquire Direct Line Insurance Group Plc, as the UK motor insurer finally succumbs to a suitor after fending off takeover interest for months.
Most Read from Bloomberg
London-listed Aviva sweetened its bid in the latest negotiations with Direct Line to 275 pence per share, according to a statement on Friday. The cash-and-stock proposal, which values Direct Line at £3.6 billion, includes dividend payments of up to 5 pence per Direct Line share.
The latest proposal is at a value that Direct Line’s board “would be minded to recommend” to its shareholders should a firm offer be made, according to the statement.
Bloomberg News reported on Thursday that Aviva was nearing a preliminary agreement to buy Direct Line. Earlier on Thursday, Bloomberg News had reported that Aviva had boosted its initial bid for Direct Line to about 261 pence per share. That’s up from its initial cash and stock bid of 250 pence per share, or £3.3 billion, which was rejected as “opportunistic.”
Direct Line shares closed broadly flat at 236 pence in London on Thursday, giving the company a market value of about £3.1 billion.
–With assistance from Jan-Henrik Förster and Leonard Kehnscherper.
(Updates with deal confirmation throughout.)
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.