Direct Line shares dive as suitor abandons bid
SHARES in Direct Line tumbled in the first session since its Belgian suitor walked away from takeover talks.
In an update after the stock market closed on Friday, ageas said it was no longer interested in buying the British firm having had two proposals rejected.
With takeover interest over – at least for now – Direct Line shares fell 11.3 pc, or 23.6 p, to 185.4 p. That valued it at £2.4 bn.
ageas first approached Direct Line in January with an offer of 231 p a share, or £3.1 bn. It raised this to 237 p a share, or £3.2 bn this month. Both proposals were dismissed by the Direct Line board.
analysts at Jefferies suggested an offer worth 270 p to 300 p would have a ‘ higher probability’ of being accepted. But ageas decided to throw in the towel.
Direct Line said it was ‘ confident’ in its ‘ standalone prospects’. The insurer also outlined plans for a £100 m cost- cutting mission it hopes to complete by the end of 2025.
Direct Line has joined the electricals retailer Currys (down 0.4 pc, or 0.25 p, to 60.5 p) in fighting off foreign predators this month. But British firms – including Wincanton ( flat at 600 p), Spirent (down 0.3 pc, or 0.6 p, to 176.5 p) and all3Media – have all been targeted by international buyers.
reports suggest S4 Capital has also become a bid target for its New York rival Stagwell. The City will be keeping a close eye to see whether the firm, set up by Sir Martin Sorrell in 2018, provides further details when it publishes its annual results on Wednesday.
Shares, which have fallen 95 pc since it peaked at 870 p in 2021, rose 6.7 pc, or 2.84 p, to 45.22 p.
russ Mould, investment director at broker aJ Bell, said: ‘This slump in valuation has left S4 looking vulnerable and it could turn from predator to prey.’
The FTSE 100 fell 0.17 pc, or 13.35 points, to 7917.57 and the
FTSE 250 slid 0.56 pc, or 110.79 points, to 19,613.53. But Goldman Sachs analysts said they still believe a record high is on the cards. The Footsie peaked at 8012 in February last year and Goldman believes it will reach 8,200 over the next 12 months.
Mobico, which was called National express before changing its name, came under pressure after it delayed publishing its annual results for the second time. The company is still reviewing the accounts of its German division. Shares fell 0.8 pc, or 0.55 p, to 70.9 p.
Water firm Pennon reassured investors that business was ticking along nicely. The group behind South West Water and Bristol Water said its results for the year to the end of March should be in line with expectations.
Shares, however, sank 1.9 pc, or 13 p, to 657 p.
Wise has poached finance chief emmanuel Thomassin from food firm Delivery hero. he will join the fintech firm in October. Shares fell 3.9 pc, or 38 p, to 935.2 p.
Iron ore miner Ferrexpo soared 7.8 pc, or 3.38 p, to 46.6 p after production levels in Ukraine hit their highest since russia invaded in February 2022.