RSA Insurance board holding out for 600p per share offer from Zurich
RSA Insurance Group’s board is believed to be holding out for a takeover bid from Zurich Insurance Group for a minimum of 600p per share, The Sunday Telegraph reported. The newspaper do not cite a source for the claim.
Zurich last week confirmed that it was thinking about making an offer for RSA, an FTSE 100 Insurance company. Reports last week said Zurich was considering an offer of 550p per share, the item noted.
An offer at 550p per share would be more than 20% higher than RSA’s undisturbed share price prior to the emergence of takeover speculation, the item said. The report noted, however, that FTSE takeover targets have typically commanded 30% premiums, with recent deals involving casualty and property insurers being agreed at premiums of more than 40%.
Is it is likely, therefore, that Zurich would need to increase its offer to secure the RSA board’s backing, the article said.
The investment banks Goldman Sachs and Robey Warshaw are advising RSA, the report said. The advisers are now focusing on a valuation of RSA, according to the newspaper.
It is understood that RSA’s brokers JPMorgan and Bank of America Merrill Lynch are also involved, the item said.
Investment bankers at Morgan Stanley are advising Zurich, the report added.
A Sunday Express report cited a source close to RSA who said the board would think about entering negotiations with Zurich if a suitable offer was forthcoming. The RSA board would have to consider an offer pitched at 616p per share, or GBP 6.2bn (EUR 8.82bn), the source added. The source cited deal values involving insurance companies and FTSE-100 companies across the board for the valuation.
Separately, the Sunday Express cited an analyst who said RSA will announce a 236% increase in pre-tax profits to GBP 232m in its interim financial report on Thursday, 6 August. RSA will also declare a 3.3p per share interim dividend, the analyst said.
RSA Insurance Group’s share price closed 3p down at 514p in London on Friday, 31 July, giving the company a market capitalisation of GBP 5.22bn.
Sunday Telegraph, Sunday Express