Goldman Sachs Group has shifted its role to advise Aviva Plc on its £3.3 billion (US$4.2 billion) takeover bid for Direct Line Insurance Group Plc, just eight months after assisting Direct Line in fending off another acquisition attempt.
The investment bank, with a team led by Anthony Gutman, Nimesh Khiroya, and Bertie Whitehead, is advising Aviva alongside Citigroup Inc, according to a regulatory filing.
Direct Line, a top UK motor insurer, has rejected Aviva’s offer, describing it as “highly opportunistic,” and has declined to engage further.
Earlier this year, Goldman Sachs was part of the advisory team that supported Direct Line’s rejection of a £3.2 billion proposal from Belgian insurer Ageas. The effort, led by Goldman’s Mark Sorrell, involved other advisers, including Morgan Stanley, RBC Capital Markets, Robey Warshaw, and JPMorgan Cazenove.
Following Ageas’ withdrawal, Goldman ended its advisory role with Direct Line in the summer and has not held an active position with the insurer since.
Goldman, which has served as a corporate broker for Aviva since last year, is now working with a separate team on the current bid. According to merger arbitrage specialist MKP Advisors, the investment bank is employing a “clean team” approach, ensuring that personnel involved in the Aviva transaction are entirely distinct from those who previously worked with Direct Line.
Direct Line has retained its earlier advisers – Morgan Stanley, RBC Capital Markets, and Robey Warshaw – to assist in its defence against Aviva’s bid.
Bloomberg reports that the insurer has also continued its relationship with Brunswick Group for public relations support, though Brunswick had previously provided advice to both Aviva and Direct Line, necessitating a choice between the two clients to avoid conflicts of interest.
Corporate brokers in the UK typically maintain relationships with their clients, offering ongoing support for investor relations in anticipation of securing larger mandates during mergers or equity transactions. In this instance, the competing interests of Aviva and Direct Line have underscored the complexities of such relationships in the context of merger and acquisition activity.
Goldman Sachs has remained a leading adviser on UK transactions in 2023, according to Bloomberg data. Notable deals include International Paper Co’s £5.8 billion bid for DS Smith Plc and the pending sale of Hargreaves Lansdown Plc to a consortium led by CVC Capital Partners Plc.
The bank also played a prominent role in Direct Line’s 2012 initial public offering, which raised £906 million.
The interconnections between Aviva and Direct Line extend beyond the current takeover bid. Direct Line’s CEO, Adam Winslow, previously headed Aviva’s UK and Ireland general insurance business, while its CFO, Jane Poole, joined the company from Aviva just last month.
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