Names of potential bidders mentioned include Germany’s Allianz SE, Denmark’s Tryg AS, and Canada’s Intact Financial Corp, the Times said.
LONDON:
Shares in Aviva shot up almost 9% on Friday, after Britain’s Times newspaper cited talk of a possible takeover of one of the UK’s largest insurers by a foreign buyer.
Names of potential bidders mentioned include Germany’s Allianz SE, Denmark’s Tryg AS, and Canada’s Intact Financial Corp, the Times said.
One of them is mulling a £6 per share offer, the newspaper said.
According to the analysts at J.P. Morgan Aviva as highly undervalued given its strong capital return potential. The report also says that Aviva is inexpensive and highlights the work of CEO Amanda Blanc in transforming the insurer into an investable company.
“It is in some ways not surprising to hear stories of this nature given how inexpensive Aviva is, in our opinion. Aviva offers a ~12% 2024E total capital return yield, including our forecast of a £300mn recurring annual share buyback,” say analysts.
Aviva recently completed the process of selling off operations outside its focus areas of the UK, Ireland and Canada. It sold its operations in Italy, Poland and Lithuania to Allianz in 2021.
Aviva declined to comment when contacted by Reuters.
By 0752 GMT, shares in the company were up 8.5% at 421 pence, heading for their biggest daily rise since August 2022, giving it a market value of around 11 billion pounds. ($13.41 billion).
The Times cited “chatter that refused to die down”.
Last month, Aviva said it had agreed to buy UK life insurance business of AIG for 460 million pounds($563 million), in the largest acquisition to date by its CEO, Amanda Blanc.
Allianz was up 1.2% at €223.35 in Frankfurt early Friday, while Tryg was up 1.1% to kr131.15 in Copenhagen. Intact closed up 0.6% at C$199.23 in Toronto on Thursday.
Agencies