RSA takeover news gets shareholders excited
Shares in insurance group RSA surged by nearly 50% last week after news of a possible takeover.

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”.
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
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Follow Matthew on Twitter: @DrMatthewPartri
-
How inheritance tax trick is helping families save ‘six-figure sums’
Happy to skip a generation to save thousands on inheritance tax? A deed of variation could be the estate planning tool you need.
-
Nationwide: House prices unexpectedly dropped in August
House prices fell by 0.1% in August in a surprise drop, according to Nationwide, as “affordability remains stretched”
-
Are wealthy whisky enthusiasts leaving Britain?
Collectables Wealthy whisky enthusiasts are heading to tax-friendly countries such as Dubai, where there is more disposable income to spend on collectable luxuries like rare whisky.
-
'The rise and fall of Kodak is a lesson for the tech giants'
Opinion The long decline of Kodak – a once-dominant company – shows why no business is safe from disruption, says Matthew Lynn
-
8 of the best properties for sale with kitchen gardens
The best properties for sale with kitchen gardens – from a 17th-century timber-framed hall house in Norfolk, to an Arts & Crafts house in West Sussex designed by Charles Voysey with a garden by Gertrude Jekyll
-
Why investors can no longer trust traditional statistical indicators
Opinion The statistical indicators and data investors have relied on for decades are no longer fit for purpose. It's time to move on, says Helen Thomas
-
Investors rediscover the virtue of value investing over growth
Growth investing, betting on rapidly expanding companies, has proved successful since 2008. But now the other main investment style seems to be coming back into fashion.
-
8 of the best properties for sale with shooting estates
The best properties for sale with shooting estates – from an estate in a designated Dark Sky area in Ayrshire, Scotland, to a hunting estate in Tuscany with a wild boar, mouflon, deer and hare shoot
-
What we can learn from Britain’s "Dashing Dozen" stocks
Stocks that consistently outperform the market are clearly doing something right. What can we learn from the UK's top performers and which ones are still buys?
-
The most likely outcome of the AI boom is a big fall
Opinion Like the dotcom boom of the late 1990s, AI is not paying off – despite huge investments being made in the hope of creating AI-based wealth