Shares in insurance group RSA surged by nearly 50% last week after it was revealed that Canadian insurer Intact Financial and its Danish counterpart Tryg have jointly approached it about a possible takeover, says the BBC. Valuing RSA at £7.2bn, the deal would be “the biggest takeover of a UK-listed company so far this year”. It would see RSA’s operations split up, with Intact keeping the Canada and UK divisions, and Tryg taking control of RSA’s Sweden and Norway units. The two firms have until 3 December to make a formal offer.
No wonder RSA’s shareholders have reacted “ecstatically”, says Ian King on Sky News. RSA is “not a company that will be greatly missed”. Thanks to unwise acquisitions and poor cost control, it has become notorious for missing profit expectations over the past two decades. While the current CEO Stephen Hester is regarded as “having done a good job”, even he “has never really succeeded” in persuading investors that RSA can deliver “above-average returns”.
Shareholders are unlikely to get a better offer, says Chris Hughes on Bloomberg. While RSA “has long been talked of as a bid target”, few potential buyers will want its “unusual bundle” of UK, Scandinavian and Canadian assets. Some, such as rival Aviva, are not only looking to conserve capital, but will be loath to enter a public auction against a consortium with “plausible synergy potential” when the starting price is “already high”. RSA shareholders would be wise to “dot the i’s and extract a binding offer here”.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Lloyds axes foreign currency fees for Club Lloyds customersClub Lloyds customers will be able to withdraw their money abroad without incurring any extra fees
-
How to invest during stagflationTrump’s tariffs look poised to push the global economy into a period of stagflation. We look at how to ensure your investments can survive a global slowdown.
-
Falling revenues and mounting debt spell trouble for Jumia TechnologiesStruggling African e-commerce platform Jumia Technologies looks headed for the exit, says Dr Matthew Partridge.
-
Bargain Britain boasts both value and momentumInterview Ian Lance, manager of the Temple Bar Investment Trust, tells Andrew Van Sickle that the outlook for UK stocks has improved and healthy long-term returns are in prospect
-
Next reports £1 billion in annual profits for the first time – what's next for the retailer?Clothing retailer Next has become only the fourth member of its sector to surpass £1 billion in annual profits. What does this mean for the company's future?
-
Best of British bargains: cash in on undervalued companies in the UK stock marketOpinion Michael Field, Chief Equity Market Strategist, EMEA, Morningstar, selects three attractive UK stocks where he'd put his money
-
Building firm Keller presents low debt and ample scope for growthGeotechnical contractor Keller, which supports vital global infrastructure, boasts rising profits and a cheap valuation
-
PZ Cussons share price down 75% in last decade – why it's one to watchOpinion Once-strong consumer-goods business PZ Cussons is out of favour with the market. That spells opportunity for investors, says Jamie Ward
-
Cash in on the biotech sector with specialist trust BioPharmaOpinion BioPharma has an attractive niche in lending to asset-rich biotechnology companies
-
India's stock market decline wipes out $1.3 trillion in market value – can investors stay optimistic?More than $1 trillion has been wiped off from India's stock market after investors turn to China. Has the emerging-market darling hit rock bottom?
