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- 📈 Direct Line Rejects Aviva’s £3.3bn Bid
📈 Direct Line Rejects Aviva’s £3.3bn Bid
Royal Mail’s Czech Mate: £3.6bn Deal Sealed?
This is Cliff Equity, the UK’s business newsletter that keeps you informed on what’s important in tech, business and finance in less than 5 minutes
In today’s stories:
Direct Line Rejects Aviva’s £3.3bn Bid
Royal Mail’s Czech Mate: £3.6bn Deal Sealed?
Fortress Snaps Up Loungers for £338m
The summary: Direct Line’s snub of Aviva’s £3.3bn festive takeover bid sets the stage for a shareholder showdown, as the clock ticks down to a Christmas Day decision.
The details:
Rejected again! Direct Line rebuffed Aviva's cheeky £3.3bn takeover bid, calling it “opportunistic” and sticking to its guns for better valuation. This marks the second spurned suitor this year.
Market tango: Post-rejection, Direct Line shares dipped 0.2%, while Aviva’s rose 1.6%. With Direct Line valued at £2.1bn and Aviva at a much rosier £13.2bn, the scales are tipped heavily.
Pitch-perfect Aviva: The insurance giant claims the deal would bring “material cost benefits” and irresistible shareholder returns, but Direct Line’s leadership insists their turnaround plan, despite recent job cuts, is the better bet.
Christmas countdown: Aviva has until 5pm on 25th December to put a ring on it—or retreat. It’s shaping up to be a festive showdown in the insurance world.
Why it matters: Aviva's bid is more than just corporate drama—it's a clash of strategies in a tough insurance market, where Direct Line's struggles make it a tempting target. For shareholders, it's a question of whether to bet on Direct Line’s self-belief or cash out on Aviva’s grand promises. And with a Christmas deadline looming, it’s the City’s version of “Deal or No Deal” wrapped in tinsel.
The summary: Royal Mail’s getting a Czech billionaire makeover with bold promises to keep it British, modernise its struggling services, and still deliver the post with a touch of royal charm!
The details:
Royal Mail's royal suitor: Czech billionaire Daniel Kretinsky is close to sealing a £3.6bn deal to buy Royal Mail, with extra guarantees like preserving the iconic name, headquarters, and universal service (six-day letter deliveries). The CWU calls talks “constructive,” but unions remain cautiously optimistic.
Promises and pensions: Kretinsky’s sweeteners include no pension raids, no compulsory redundancies until 2025, and keeping Royal Mail very much British – at least for the next five years. Extra safeguards are on the table to placate wary stakeholders.
Letters down, parcels up: With letter volumes halved since 2011, Royal Mail’s struggles persist despite booming parcel deliveries. Parent company IDS scraped a profit thanks to German and Canadian operations, while the UK arm keeps bleeding cash.
Reforms looming: The universal service obligation faces a shake-up. Kretinsky backs cost-cutting tweaks like reducing second-class deliveries, but promises to uphold six-day services for as long as he’s alive. Let’s hope his word lasts as long as the post.
Why it matters: Royal Mail, a cherished British institution, is being handed to a billionaire with big promises and a ticking five-year clock on its UK roots. With posties battling dwindling letters and booming parcels, the future of six-day delivery hangs by a thread – or a pension fund promise. If Kretinsky fumbles, we could be swapping Her Majesty's service for something far less royal.
The summary: Fortress has snapped up Loungers for £338m, seeing the potential in a thriving British business that’s already serving up impressive profits, and adding another gem to its growing UK portfolio.
The details:
Loungers goes premium: Fortress Investment Group snaps up the Cosy Club owner for £338m, offering 310p per share—a juicy 30% above yesterday’s closing price. Cheers to that!
Foreign appetite for bargains: Another British business bites the bullet as international investors pounce on undervalued London-listed firms. Loungers’ shares “failed to reflect its positive performance,” according to Fortress.
Profits pouring in: Loungers served up a 51% rise in pretax profits and 19% revenue growth in its interim results. Fortress is backing the team’s ambitious plans to keep the momentum flowing.
From wine to wins: Fortress, already behind Majestic Wines and Poundstretcher, praises Loungers’ management and vows to be a "responsible steward" of this latest UK investment. Let’s hope they’re not stretching it.
Why it matters: Loungers’ takeover shows just how hungry foreign investors are for undervalued British gems, with our homegrown businesses being bought up faster than a Friday night round at the pub. It’s a reminder that UK stocks remain a bargain buffet, even as companies like Loungers deliver sparkling results. For Fortress, it’s another notch in their UK portfolio, proving there’s no such thing as too many cosy corners or discounted pints.
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