Direct Line rejects second takeover approach from Ageas, shares tumble

(Sharecast News) - Direct Line tumbled on Wednesday after saying it had received and rejected a second takeover approach from Belgium's Ageas as it continues to undervalue the group. On 28 February, the London-listed insurer said it had rejected a £3.1bn offer from Ageas. This comprised 100p in cash and one new Ageas share for every 25.24 Direct Line shares, and implied a value of 233p per share.

It said on Wednesday that on 9 March it received a second "highly conditional, non-binding indicative" proposal from Ageas at 120p a share in cash one new Ageas share for every 28.41 Direct Line shares. This has an implied value of 237p a share.

"The board considered the latest proposal with its advisers and continues to believe the latest proposal is uncertain, unattractive, and that it significantly undervalues Direct Line Group and its future prospects while also being highly opportunistic in nature," it said. "Accordingly, the board unanimously rejected the latest proposal."

At 1040 GMT, the shares were down 9.6% at 204.22p.