Direct Line says Board ‘unanimously rejected’ Aviva’s ‘opportunistic’ offer

In a notice to the London Stock Exchange, Direct Line (DIISY) stated: The Board of Direct Line Group notes the recent announcement made by Aviva (AVVIY) plc regarding a possible offer for the Company and confirms that on 19 November 2024 it received an unsolicited, indicative and conditional cash and share proposal from Aviva to acquire the entire issued and to be issued share capital of Direct Line Group. As set out in the Aviva announcement, the terms of the Proposal comprised 112.5 pence in cash and 0.282 new Aviva shares for every Direct Line Group share. The Proposal implied a value of 250 pence per Direct Line Group share (based on the closing price of Aviva shares on 18 November 2024). The Board considered the Proposal with its advisers and concluded that it was highly opportunistic and substantially undervalued the Company. The Board has considerable conviction in the capabilities of our newly established leadership team and stands firmly behind their delivery of our strategy. Under this strategy, the Company continues to make early progress towards our financial targets, and expects to deliver attractive growth in profitability, capital generation and shareholder returns. As such, the Board considered the Proposal to not reflect the standalone value that can be delivered by the Company, and hence considered the possible offer highly opportunistic in nature. Accordingly, the Board unanimously rejected the Proposal on 26 November 2024. There can be no certainty that any firm offer will be made and, save as set out in the Aviva announcement dated 27 November 2024, nor as to the terms on which any offer will be made. In accordance with Rule 2.6(a) of the Code, Aviva is required, by not later than 5.00 p.m. on 25 December 2024, to either announce a firm intention to make an offer for the Company in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer for the Company, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline can be extended with the consent of the Panel on Takeovers and Mergers in accordance with Rule 2.6(c) of the Code. For the purposes of Rule 2.5(a) of the Code, this announcement is not being made with the approval of Aviva. As a consequence of this announcement, an ‘offer period’ has now commenced in respect of the Company in accordance with the rules of the Code and the attention of shareholders is drawn to the disclosure requirements of Rule 8 of the Code.”