RSA becomes the only riser on the FTSE as deadline looms for Zurich bid
RSA became the only riser on the FTSE 100 as the deadline for a bid by rival Zurich loomed.
With the cutoff for Zurich to announce its intention to buy the British insurer due at 5pm tomorrow, shares rose 1.5 per cent to 499p in lunchtime trading. If it does not make a formal bid for RSA by then, it will be precluded from making another offer for the next six months.
An extension to the takeover talks can only be requested by RSA, and the request must be made by the same deadline.
RSA investors are preparing for what is perceived by some analysts to be a “lowball” offer of 550p per share. In the company’s first half results statement, Zurich boss Martin Senn said that, while the takeover would bring in “significant benefits”, the group will not overpay for RSA.
[stockChart code=”RSA” date=”2015-08-24″]
He said: “Any capital deployment would need to meet the same hurdles that we apply to any other investment.”
Meanwhile, RSA has not been overly enthusiastic about the potential deal. Chief executive Stephen Hester told City PM earlier this month that he had “no idea” whether Zurich would make an offer.
He also said: “Hopefully the talks will be over quickly enough that it won’t have an impact, because it’s unsettling for our staff.”
Both RSA and Zurich declined to comment.