Direct Line’s chief executive Adam Winslow has launched a spirited defence of the troubled insurer’s independence, urging shareholders to support his nascent turnaround strategy in the face of a £3.3 billion takeover approach from rival Aviva.
The embattled insurance boss, who took the helm in March after departing his role as head of Aviva’s UK and Ireland operations, emphasised the company’s potential for independent growth. “We’re making excellent progress in the early stages of a significant turnaround, with a refreshed and world-class leadership team in place to deliver the strategy,” Winslow stated in his first public response to the bid.
The takeover attempt, spearheaded by Winslow’s former superior Dame Amanda Blanc, values Direct Line significantly above its current market capitalisation of £2.1 billion. The board has dismissed Aviva’s 250p per share offer as “highly opportunistic,” despite the proposal representing a substantial premium to Direct Line’s pre-bid trading price of approximately 150p.
Direct Line’s transformation strategy includes ambitious cost-cutting measures targeting £100 million in savings by the end of 2025, with £50 million already secured. The plan involves reducing the workforce by 550 positions and, notably, introducing the Direct Line brand to price comparison websites for the first time.
Industry analysts remain divided on the bid’s prospects. Deutsche Bank suggests Aviva could raise its offer to 270p per share, while Sir Peter Wood, Direct Line’s founder, indicated that a 10% increase in the current bid would constitute a “fair result” for shareholders.
The situation is further complicated by Winslow’s own compensation package, which includes potential earnings of up to £6 million over three years, partly comprising bought-out bonus share awards from his time at Aviva. This dynamic adds an intriguing personal dimension to the corporate battle between the insurance industry heavyweights.
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