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”.

Recommended

Is the oil market heading for a supply glut?
Oil

Is the oil market heading for a supply glut?

Many people assume that the high oil price is here to stay – and could well go higher. But we’ve been here before, says Max King. History suggests tha…
16 May 2022
A family-run investment trust to buy and lock away
Investment trusts

A family-run investment trust to buy and lock away

Menhaden Resource Efficiency made a slow start, but progress is encouraging. Buy before the discount closes, says Max King.
16 May 2022
Get set for another debt binge as real interest rates fall
UK Economy

Get set for another debt binge as real interest rates fall

Despite the fuss about rising interest rates, they’re falling in real terms. That will blow up a wild bubble, says Matthew Lynn.
15 May 2022
Hong Kong’s brain drain
Chinese economy

Hong Kong’s brain drain

A change in the political atmosphere and a harsh zero-Covid regime has seen thousands flee the global financial hub. Does it have a future – or will S…
14 May 2022

Most Popular

Get set for another debt binge as real interest rates fall
UK Economy

Get set for another debt binge as real interest rates fall

Despite the fuss about rising interest rates, they’re falling in real terms. That will blow up a wild bubble, says Matthew Lynn.
15 May 2022
High inflation will fade – here’s why
Inflation

High inflation will fade – here’s why

Many people expect high inflation to persist for a long time. But that might not be true, says Max King. Inflation may fall faster than expected – and…
13 May 2022
What the Ukraine crisis might mean for ESG investing
Advertisement Feature

What the Ukraine crisis might mean for ESG investing

The Ukraine crisis has brought many of the issues around ESG investing into sharper focus. Where does the sector go from here?
3 May 2022