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Meanwhile, Aviva shares have fallen by 2.7% at the open, making the UK’s largest insurer one of the biggest losers on the FTSE 100 index this morning. Rival insurer Admiral is the biggest riser on the FTSE 100, up by 3%.
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Direct Line shares are the top riser on the FTSE 250 index, rising above 218p, still some way below the indicative bid price of 250p.
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Aviva has offered to pay 112.5p in cash plus 0.282 new Aviva shares for every Direct Line share, making the offer worth 250p a share, based on Aviva’s share price at 488p a share on 18 November, the day before it made the takeover approach.
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Direct Line has rejected the indicative offer as “opportunistic,” but some analysts disagree.
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Panmure Gordon analyst Abid Hussain said:
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We believe that an offer at around 250p per share or slightly above is good for Direct Line shareholders.
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The offer represents a 60% premium to Direct Line’s shares on 18 Nov. Or 57.5% premium to close yesterday.
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Direct Line is in the middle of a turnaround after a string of profit warnings and a new management team – largely ex Aviva including the CEO Andy Winslow and CFO Jane Poole), some of whom have not even started yet.
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Hussain said:
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The Competition and Markets Authority will have a view on the combined group BUT we assume that Aviva have considered this and have discounted it as being an issue. We understand that the combined motor market share would be less than Admiral’s but in home, where Aviva has a market share of 12%, the combined group would be No.1.
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No cost savings/ synergies have been disclosed but we assume at least 10% as being a likely figure. Aviva have stated that cost synergies will be in excess of the £100m cost savings that Direct Line have previously identified itself.
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Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
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Confidence among British consumers has remained weak as Christmas approaches.
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More people worry about the state of the economy than before the autumn budget, according to the British Retail Consortium’s latest survey. A measure of consumer expectations for the next three months worsened slightly to -19 in November, from -17 in October.
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At the same time, people’s expectations for their own personal financial situation improved slightly to -3 this month from -4 in October.
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Personal retail spending expectations improved slightly ahead of Christmas, to +3 from +2, while personal spending overall remained at +17, and personal saving stayed at -9.
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Helen Dickinson, the BRC’s chief executive, said:
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There was little shift in consumer confidence since the chancellor’s budget, with many worried about the economy in the lead up to Christmas. While there was a very slight improvement in people’s expectations of their personal financial situation, this was offset by declining expectations of the wider economy.
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Personal retail spending remained positive, edging up slightly, though this was to be expected as consumers prepare for the festive season. Within this, non-food spending expectations remained low, though expectations of spending on eating out improved the most out of all categories, as people prepare for Christmas catchups with friends and relatives.
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The last month clearly did little to shift the dial for households either positively or negatively, however, the same cannot be said for the retail industry. With over £7bn in additional costs in 2025 resulting from the budget, retailers will have little choice but to raise prices or reduce investment in jobs and shops. To mitigate this, government must ensure that changes to the business rates system, planned for 2026, bring about a meaningful reduction in bills for all retailers.
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Last night, Aviva, the UK’s biggest insurer, revealed that it had made a £3.3bn approach to buy its smaller UK rival Direct Line – but was rejected.
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Let’s see how the shares respond when markets open at 8am. We’ll monitor any developments.
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The Agenda
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9am GMT: European Central Bank general council meeting
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9am GMT: Spain inflation for November (forecast: 2.4%, previous: 1.8%)
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11am GMT: Eurozone consumer confidence final for November
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2pm GMT: Germany inflation for November (forecast: 2.3%, previous: 2%)
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main events
Peel Hunt analyst Andreas van Emden said Aviva's offer was reasonable but could be sweetened by up to 265p per share.
In our view, this offer is a reasonable discount to Direct Line Group's (DLG) full recoverability and includes a bid premium.
The rejection of Aviva's offer reflects the Board's confidence in DLG's independent outlook, but it still believes it makes sense to engage with Aviva.
Aviva could be persuaded to sweeten the deal from 260p to 265p, which could help satisfy the DLG board. DLG's standalone strategy has downside risks, and the combination of Aviva and DLG with some upside could be an attractive proposition, which we believe is worth considering. Masu.
matt blitzmanA senior equity analyst at Hargreaves Lansdown said:
direct line The company is once again working hard on an acquisition, as its board of directors has rejected a tentative takeover offer from the company. Aviva This is because the 250 pence per share shown in the table significantly underestimates the company's value. It's not a pretty offer. The 250p is split into half cash and half Aviva shares, which always makes things a little more complicated.
Directline is no stranger to takeover bids, having rejected multiple attempts from Belgian insurer Eias earlier this year. Some argue that Aviva is better suited as it already shares the market with Directline in the UK, but if you want Directline to take your offer seriously, Aviva will need to improve its strategy and offer. will need to be further strengthened.
Direct Line shares rise 38% after Aviva's £3.3bn offer
direct line Shares rose 38% on last night's news. Aviva swooped in with a takeover approach, but Direct Line refused.
Meanwhile, Aviva shares fell 2.7% on the move, making Britain's biggest insurer one of the biggest losers on the FTSE 100 index this morning. rival insurance company admiral was the biggest gainer in the FTSE 100, rising 3%.
Direct Line shares are the top gainers on the FTSE 250 index, trading at more than 218p, but still well below the expected bid price of 250p.
Aviva offered to pay 112.5p in cash and 0.282 new shares per share. direct line Based on Aviva's share price of 488p per share on November 18, the day before the takeover approach, the offer would be worth 250p per share.
Direct Line rejected the suggestive proposal as “opportunistic”, but some analysts disagree.
Panmure Gordon Analyst Abid Hussein Said:
We believe that an offer of around 250 pence per share or slightly above is good for Direct Line shareholders.
The offer represents a 60% premium to Direct Line shares on November 18, or a 57.5% premium to yesterday's closing price.
Direct Line is in the midst of a restructuring after a series of profit warnings and a new management team, mostly ex-Aviva, including its CEO andy winslow and CFO Jane Poole), some of whom haven't even started yet.
Mr Hussein said:
The Competition and Markets Authority will have a view on the combined group, but Aviva appears to have considered this and dismissed it as an issue. I understand that the combined market share of motors is smaller than Admiral, but domestically Aviva has a 12% market share and the combined group would be No.1.
Cost savings/synergies are not disclosed, but we assume at least 10% is a likely figure. Aviva says the cost synergies exceed the £100m of cost savings previously revealed by Direct Line.
Introduction: UK consumer confidence remains weak post-Budget as Christmas approaches
good morning. Welcome to our regular coverage of business, financial markets and the global economy.
British consumer confidence remains weak as Christmas approaches.
More people are now worried about the state of the economy than they were before the autumn budget, according to new research from the British Retail Consortium. The index showing consumer expectations for the next three months was -19 in November, slightly worse than -17 in October.
At the same time, people's expectations for their personal finances improved slightly this month to -3 from -4 in October.
Personal retail spending expectations improved slightly ahead of Christmas, from +2 to +3, but overall personal spending remained at +17 and personal savings at -9.
helen dickinsonThe BRC chief executive said:
There has been little change in consumer confidence since the Prime Minister's budget proposal, and many people were concerned about the economy ahead of Christmas. People's expectations about their personal finances improved slightly, but this was offset by a decline in expectations about the economy as a whole.
Personal retail spending remained positive and increased slightly, which was expected as consumers prepare for the Christmas season. Of this, expectations for non-grocery spending remain low, but expectations for spending on eating out improved the most of all categories as people prepare for Christmas gatherings with friends and relatives.
While last month clearly brought about little change, either positive or negative, for household finances, the same cannot be said for the retail industry. The budget will result in more than £7 billion in additional costs in 2025, leaving retailers with little choice but to raise prices or cut investment in jobs and stores. To alleviate this, the government must ensure that the changes to the business rates system scheduled for 2026 will result in meaningful bill reductions for all retailers.
Last night, Aviva, the UK's biggest insurer, revealed its £3.3bn approach to buy smaller British rival Directline had been rejected.
Let's see how stocks react when the market opens at 8am. We will continue to monitor all developments.
agenda
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9:00 a.m. (GMT): European Central Bank General Meeting
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9am (GMT): Spain's inflation rate in November (forecast: 2.4%, previous forecast: 1.8%)
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11am (GMT): Eurozone consumer confidence final figures for November
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2pm GMT: German inflation in November (forecast: 2.3%, previous: 2%)
