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FTSE 250 movers: Direct Line surges on Ageas approach

By Frank Prenesti

Date: Wednesday 28 Feb 2024

(Sharecast News) - FTSE 250 (MCX) 18,981.36 -0.95%
Shares in Direct Line Insurance Group motored ahead on Wednesday, after Belgium's Ageas confirmed it was considering a possible £3.1bn bid for its UK rival.

In a statement to the London Stock Exchange, Ageas said it was in the preliminary stages of considering an offer for the insurer.

It continued: "Ageas firmly believes that the combination of Ageas' and Direct Line's UK businesses will be beneficial for both Ageas and Direct Line shareholders, providing a meaningful opportunity to unlock shareholder value through the delivery of significant operation and capital synergies."

The possible offer would see shareholders receive 100p per share in cash alongside one newly-issued Ageas share for every 25.24 Direct Line shares.

Ageas said that based on Tuesday's closing price, the bid had an implied value of 233p per share, valuing the entire issued and to be issued ordinary share capital at £3.095bn.

By 1300 GMT, shares in Direct Line had surged 27% to 207p.

Direct Line declined to comment. However, earlier on Wednesday Bloomberg reported that it had already rejected an approach from Ageas, made earlier in the month.

Direct Line was founded in 1985, and was the first to offer car insurance direct to customers, rather than through brokers.

It was acquired by the insurance division of Bank of Scotland in 2003 before being spun out via an initial public offering in 2012.

As well as Direct Line, it owns the Churchill, Green Flag and Privilege brands.

HICL said it had was selling its entire stake in the US Northwest Parkway toll-road project (NWP) to VINCI Highways for $232m and starting a £50m share buyback with the proceeds.

The sale proceeds represent a 30% premium to the company's September 30, 2023 valuation. Completion is expected in the second quarter of this year, the company said on Wednesday.

UK luxury carmaker Aston Martin Lagonda more than halved annual losses last year, driven by higher prices for its high-end vehicles.

The company on Wednesday reported an adjusted pre-tax loss of £171.8m for the year to December 31, compared with £451m a year earlier and much smaller than the £209m expected from analysts in a company-compiled consensus.

"While recognising the ongoing geopolitical and macroeconomic volatility and associated inflationary and supply chain uncertainties, our world-class teams continue to collaborate with our partners, seeking to minimise potential impacts on our operations," the company said.

"The rich mix of sales, driven by our ongoing commitment to product innovation, supported growth in average selling prices to record levels."

"This, combined with our ongoing portfolio transformation, resulted in a significantly enhanced gross margin, remaining on track to achieve our longstanding target of around 40% gross margin in 2024."

Market Movers

FTSE 250 - Risers

Direct Line Insurance Group (DLG) 204.60p 25.25%
HICL Infrastructure (HICL) 124.80p 2.63%
Bluefield Solar Income Fund Limited (BSIF) 104.80p 2.34%
Aston Martin Lagonda Global Holdings (AML) 180.60p 2.32%
RHI Magnesita N.V. (DI) (RHIM) 3,670.00p 2.29%
Vietnam Enterprise Investments (DI) (VEIL) 595.00p 2.06%
ICG Enterprise Trust (ICGT) 1,234.00p 1.82%
Bank of Georgia Group (BGEO) 4,600.00p 1.77%
Me Group International (MEGP) 160.80p 1.26%
GCP Infrastructure Investments Ltd (GCP) 72.30p 1.12%

FTSE 250 - Fallers

Future (FUTR) 629.50p -6.60%
Ferrexpo (FXPO) 72.25p -4.49%
Watches of Switzerland Group (WOSG) 417.80p -4.39%
Grainger (GRI) 249.40p -4.22%
Helios Towers (HTWS) 74.40p -4.19%
Pennon Group (PNN) 654.00p -3.89%
Workspace Group (WKP) 476.00p -3.88%
Coats Group (COA) 66.70p -3.75%
Target Healthcare Reit Ltd (THRL) 75.70p -3.57%
Mobico Group (MCG) 78.15p -3.52%

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