There has been an influx of cash at UK motor insurance firm Hastings after a 30% stake in the firm was snapped up for around £490 million.
The cash boost has come from South African investment group Rand Merchant (RMI), which, according to a
Financial Times report, has bought up the majority of its stake from the company’s largest shareholder Goldman Sachs. It is thought that it will pay from 248p-255p per share – significantly up from the company’s closing price of 221p at the end of Tuesday.
The move was greeted with open arms by the markets – Hastings shares jumped by 5% on the back of the investment.
As part of the deal, RMI will gain the opportunity to nominate a member of the board – however, a standstill agreement will restrict its opportunity to buy further shares.
“RMI has a number of investments in insurance businesses in South Africa, Australia, New Zealand and the UK,” said Gary Hoffman, chief executive of Hastings. “Given this experience, Hastings will look to explore potential areas of cooperation with RMI and OUTsurance in the future that would accelerate execution of our existing strategy including in the areas of home, data analytics, mobile propositions and operational efficiencies.”
The deal is expected to be completed in May, subject to regulatory approval.
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