UK insurer Direct Line has declined a buyout proposal of nearly £3.1bn ($3.93bn) from Belgian insurance group Ageas.  

The offer, which Direct Line believes “significantly undervalued” the company, consisted of 100p in cash and one new Ageas share for every 25.24047 Direct Line shares. 

In a statement, Direct Line said: “The board considered the proposal with its advisers and considered it to be uncertain, unattractive, and that it significantly undervalued Direct Line Group and its future prospects while also being highly opportunistic in nature. 

“The board is confident in Direct Line Group’s standalone prospects given its strong strategic position, powerful brands, and robust capital position.” 

The development comes amid a period of leadership transition for Direct Line. 

Following the resignation of CEO Penny James last year due to an unanticipated rise in weather-related claims, former Aviva UK CEO Adam Winslow will assume permanent leadership of the company on 1 March 2024. 

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“He [Winslow] is tasked with refreshing the strategy and operational focus of the Group with the clear objective of returning to a sustainable level of operating profit over time,” Direct Line said.  

The company has been trying to boost its balance sheet since James’ departure.  

In September 2023, Direct Line agreed to sell its commercial lines business to Intact Financial and its subsidiary RSA Insurance in a deal valued at £550m.  

For its part, Ageas said it “firmly believes that the combination of Ageas’ and Direct Line’s UK businesses will be beneficial for both Ageas and Direct Line shareholders”. 

Earlier this month, reports emerged that Fosun International is looking to sell off its minority stake in Ageas. 

Fosun owns a 10% stake in Ageas, valued at around $790m (€727.82m).