After last week’s bombshell announcement that
Zurich Insurance group was considering an offer for RSA Insurance Group, the industry has been fixated on how RSA would respond to the prospective deal.
Now it has an answer.
Stephen Hester, RSA’s chief executive officer in the UK, has made a bold statement to the Swiss insurer, announcing that his company is already driving significant value for shareholders, and that he was “not fussed or flustered” by the idea of a forthcoming acquisition, according to the
Wall Street Journal.
RSA is particularly appealing to Zurich, as it posted impressive midyear financials. The company reported an 84% increase in operating profit, with improvements made “on both a headline and underlying basis.”
Zurich, on the other hand, witnessed its operating profit drop 15%, which the company itself acknowledged as “below our expectations.” The Swiss insurer relayed to its shareholders that it would ensure its takeover deal nets a 10% or greater return, or else it would “simply return the company’s cash pile to investors.”
Hester continued to reiterate that RSA was poised for substantial growth, even it continues to remain independent of Zurich.
“I believe on a stand-alone basis we can make this company much more valuable than it is today,” he told
WSJ.
He did not dismiss the benefits of a merged entirely, though, admitting, “We can perform very well on our own but obviously that’s not the only model that can perform well. There are others.”
RSA Canada CEO Rowan Saunders was not able to elaborate further, due to restrictions placed on publicly traded companies.
“I can only really iterate what RSA has said at the group level,” Saunders said.
