RSA Insurance Group has allegedly received a take-over bid of £7.1 billion (approx. CA$12.14 billion) from a consortium of Canadian insurer Intact Financial and Danish insurer Tryg.
According to reports by both Bloomberg and Reuters, the UK-based property & casualty insurer has released a statement confirming the proposed cash bid of 685 pence per RSA share – an offer that would represent a 49% premium to RSA’s Wednesday closing price on the London Stock Exchange.
The insurer explained in a statement that shareholders would get the interim dividend of 8 pence per share, as promised prior to this potential take-over bid. RSA also said it will strongly consider the consortium’s offer, thus hinting at the possibility of a formal bid, but that the proposal remains subject to due diligence.
Should the deal go ahead, RSA’s UK business, Canadian business and its international division would be assumed by Intact Financial, the largest provider of P&C insurance in the Canadian market, according to the Bloomberg report. RSA’s units in Sweden and Norway would go to Tryg, and the Denmark business would be co-owned by both firms.
News of the potential bid broke shortly after London-based RSA released its Q3 2020 financial results. Group net written premiums of £4,663 million (approx. CA$7977 million) are down 3% from Q3 2019 (excluding the estimated impacts of COVID-19 and in line with its plans) and, in Canada premiums of £1,248 million (approx. CA$2,135 million) were down 1% (excluding estimated COVID-19 impacts premiums increased 4%).
Meanwhile, the group business operating profit for the first nine months of 2019 is up and registered an improved combined ratio and lower investment income, even with the addition for the UK BI Court case in September.
