Ageas SA, the Belgian insurer pursuing a takeover of Direct Line Insurance Group PLC, its London-listed rival, is facing opposition from one of its own leading shareholders to a potential deal, according to Sky News.

Sky reported that a top 10 investor in Ageas is canvassing the views of fellow shareholders in an attempt to halt its efforts to buy Direct Line.

Citing ‘City sources’, Sky said the investor, who declined to be named, believed the approach was ‘aggressive, unsolicited and opportunistic’.

Sky reported that a source close to the shareholder said a deal would disrupt the focus on Ageas’s own strategy ‘following a period of very weak performance’ and said the pursuit ignored ‘significant headwinds’ in the UK personal lines business, including regulatory scrutiny and claims inflation.

https://news.sky.com/story/direct-line-suitor-ageas-faces-investor-opposition-to-bid-pursuit-13094466

The emergence of its position comes just a day after Direct Line said it had rejected a ‘highly conditional’ cash-and-stock proposal worth 237 pence per share.

On Wednesday, Ageas described its fresh bid approach for Direct Line as ‘compelling’.

Ageas Chief Executive Hans De Cuyper said the improved possible offer ‘delivers substantial cash proceeds to Direct Line shareholders, whilst ensuring they benefit from the material value creation that we believe the combination of the UK businesses of Ageas and Direct Line will deliver’.

But Direct Line, the Bromley, England-based motor and home insurer rejected the modestly improved terms, calling them ‘unattractive’.

Direct Line said the latest proposal, received on Saturday, comprised 120 pence in cash and one new Ageas share for every 28.4 Direct Line share.

At the closing share price last Friday, the day before the proposal was received, this implied a value of 237p per Direct Line share. The offer would value all of Direct Line around £3.07 billion.

Ageas said the new offer valued each Direct Line share at 239p, as per closing share prices on Tuesday.

Shares in Direct Line were down 4.6% to 206.00p in London on Thursday afternoon. Ageas was down 1.2% to €39.29 in Brussels.

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