Ex-prospective buyer Ageas is moving on amid Direct Line Insurance Group’s (Direct Line Group or DLG) lack of interest.
After two unsuccessful attempts to initiate dialogue with the DLG board regarding a possible takeover deal, Ageas has decided not to make an offer after all.
“We had hoped to reach agreement on a jointly recommended firm offer together with the Direct Line board,” Ageas chief executive Hans De Cuyper said. “However, I am convinced that, given the circumstances, we took the right decision not to make an offer, staying true to who we are and what we stand for in terms of maintaining a friendly approach and respecting our financial discipline.
“I sincerely want to thank our employees and advisors who delivered outstanding performance exploring this opportunity, and our investors for their continued trust in our company.”
Earlier this month, DLG turned down a second non-binding indicative proposal from Ageas after the first rejection in January. Ageas approached the DLG board on January 19 with an initial possible offer proposal before improving it on March 9. In both instances, Ageas’ possible offer was described by DLG’s camp as uncertain and unattractive.
With new chief executive Adam Winslow at the helm since the beginning of March, DLG appears all the more determined to make it on its own.
“The board is confident in Direct Line Group’s standalone prospects,” the insurer reiterated on Friday. “As communicated at Direct Line Group’s 2023 preliminary results on March 21, 2024, the board believes under Adam Winslow’s leadership the company is well-positioned to drive material improvement in performance that is expected to unlock significant value for Direct Line Group shareholders.”
Last week, DLG reported its preliminary results for the year ended December 31, 2023. The company’s profit before tax amounted to £277.4 million – a major turnaround from 2022’s pre-tax loss worth £301.8 million. Operating loss from ongoing operations, however, surged to £189.5 million, a steeper dive than the previous year’s £6.4 million operating loss.
Winslow is optimistic, though, citing “the right strategy in place and determined actions” at the time.
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