RSA gets US$9.5b offer in year's biggest UK takeover

[LONDON] RSA Insurance Group received a £7.2 billion (S$12.7 billion) takeover proposal from Canada's Intact Financial and Danish insurer Tryg, paving the way for the biggest acquisition of a UK-listed company this year.

The consortium is now conducting due diligence on the blue-chip British insurer after proposing a potential cash bid of 685 pence per share, RSA said in a statement late Thursday, confirming an earlier Bloomberg News report. The price represents a 49 per cent premium to RSA's last close before the announcement.

RSA is set to be broken up under the plan, with Intact keeping its Canadian and UK and international operations. Tryg would take the Swedish and Norwegian operations, which will help make it Scandinavia's biggest listed property and casualty insurer. RSA's Danish business would be jointly owned by the two firms.

The offer represents "great value for shareholders," as RSA shares have struggled since 2018, according to Royal Bank of Canada. While a competing offer from a consortium of Aviva and Sampo Oyj would make sense, neither company is in a position to do a deal now, Citigroup analyst James Shuck said.

"It's difficult to see another bidder emerging at this point," Mr Shuck wrote in a report Thursday. "Any rival bidder would find it very difficult to match the offer price given the size of the synergies that would be available to the existing consortium."

BLOOMBERG