Aviva Plc has reportedly raised its offer for Direct Line Insurance Group Plc to about £3.4 billion ($4.4 billion), a few days after its initial proposal was rejected.
London-listed Aviva has made a fresh bid of about 261 pence per share as it seeks to convince Direct Line’s board to engage, the people said, asking not to be identified because the information is private. The new proposal is approximately 4% higher than Aviva’s initial cash and stock proposal of 250 pence per share last week, which was rejected by Direct Line.
It’s unclear whether Aviva’s latest proposal will be enough to bring Direct Line to the negotiating table. Direct Line said last week that Aviva’s proposal was “highly opportunistic” and that its new leadership team would be able to deliver attractive growth.
Shares of Direct Line jumped as much as 7.7% on Thursday afternoon. The stock gained 0.3% as of 3:41 p.m. in London, giving the company a market value of about £3.1 billion. Aviva rose 1.2%.
Earlier this week, Berenberg increased its target price for Direct Line to 270 pence per share and said management sees a clear path to executing their strategic plan. Berenberg analysts wrote that Aviva has “ample capacity” to raise its bid, and said their base-case scenario is for an increased offer of 275 pence. JPMorgan Chase & Co. analysts have also written that Aviva might need to increase its bid to more than 275 pence in order to win approval from Direct Line’s board.