The company, which has embarked on a turnaround strategy, rejected Aviva's non-binding offer on value grounds but its larger rival, and other players, could yet come forward with a sweetened deal according to many analysts.
Direct Line, the UK insurer, has seen its share price surge by more than a third after it rejected a takeover offer from larger rival Aviva. The non-binding cash and shares offer, which valued the struggling firm at £3.3bn, represented a 60% premium to the closing price for Direct Line's shares on Monday 18 November - the day before it was made. Direct Line said it saw the proposal as 'highly opportunistic', adding that it 'substantially undervalued the company'.
Earlier this month Direct Line, which includes the Churchill and Privilege brands, revealed a 'series of initiatives' designed to slash its cost base, with 550 job losses included in the cuts. Its statement on Wednesday evening stated that it continued to make progress towards its financial and profitability targets under the turnaround plan. Shares, which had plunged by 14% since Ageas ended its interest, rose by as much as 38% at the open on Thursday.
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