Aviva AV. has increased its offer for Direct Line Insurance Group DLG to around £3.4 billion, Bloomberg reports.
Bloomberg sources that London-based Aviva has made a fresh bid of about 261p per share as it seeks to secure the backing of Direct Line’s board.
The new proposal is about 4% higher than Aviva’s initial cash and stock proposal of 250p per share last week, or £3.26 billion, which was rejected by Direct Line.
Under the plan Direct Line shareholders would be entitled to receive 112.5p per share in cash and 0.282 of a new Aviva share for each Direct Line share.
Shares in Direct Line initially rose more than 7% on the news before settling 0.5% higher at 238.00p in London. Aviva was 1.2% higher at 486.19p.
Last week Aviva said it was a “highly attractive” and “compelling” offer with “high execution certainty”.
But Direct Line dismissed it as “highly opportunistic” and said it “substantially undervalued the company.”
Direct Line has undertaken a strategic revamp under the stewardship of Chief Executive Adam Winslow, who the firm poached from potential suitor Aviva. Winslow had been CEO of UK & Ireland General Insurance for Aviva.
By Jeremy Cutler, Alliance News reporter
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