13 March 2024

The Board of Direct Line Group (the “Board”) notes that on 9 March 2024, the Board received a second highly conditional, non-binding indicative proposal from Ageas to acquire the entire issued and to be issued share capital of Direct Line Group (the “Latest Proposal”).

The terms of the Latest Proposal comprise 120 pence in cash and one new Ageas share for every 28.41107 Direct Line Group shares. As at closing on 8 March 2024, being the trading day immediately prior to the day the Latest Proposal was received by the Board, the Latest Proposal implied a value of 237 pence per Direct Line Group share, and represented an increase in value of approximately 3% relative to the first proposal, which as at closing on 8 March 2024, implied a value of 231 pence per Direct Line Group share.

The Board considered the Latest Proposal with its advisers and continues to believe the Latest Proposal is uncertain, unattractive, and that it significantly undervalues Direct Line Group and its future prospects while also being highly opportunistic in nature. Accordingly, the Board unanimously rejected the Latest Proposal.

The Board is confident in Direct Line Group’s standalone prospects. Direct Line Group will release its 2023 preliminary results on Thursday 21 March 2024 and will also then provide an update on further initiatives to build on the operational improvements implemented during 2023.

There can be no certainty that any firm offer will be made and, save as set out in Ageas’ announcement dated 28 February 2024 (and subject to the reservations set out therein), there can be no certainty of the terms on which an offer may be made.

Direct Line Group shareholders are advised to take no action. A further announcement will be made as and when appropriate.

Any offer for Direct Line Group is governed by the Code. In accordance with Rule 2.6(a) of the Code, Ageas is required, by not later than 5.00 p.m. (London time) on 27 March 2024, either to announce a firm intention to make an offer for the Company in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer for the Company, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline can be extended with the consent of the Panel on Takeovers and Mergers in accordance with Rule 2.6(c) of the Code.

The person responsible for arranging the release of this announcement on behalf of the Company is Neil Manser, Chief Financial Officer. 

For the purposes of Rule 2.5(a) of the Code, this announcement is not being made with the approval of Ageas.

For further information, please contact:

Direct Line Group

Paul Smith

Director of Business Performance and Investor Relations

Email: [email protected]

Tel: +44 (0)7795 811263

Alan Oliver

Group Communications

Email: [email protected]

Tel: +44 (0)7385 481295

Brunswick

Tom Burns / Nick Cosgrove / Diana Vaughton

+44 (0)20 7404 5959

Goldman Sachs International

Mark Sorrell / Charlie Lytle / Ashish Pokharna 

+44 (0)20 7774 1000

Morgan Stanley

Ben Grindley / Laurence Hopkins / Melissa Godoy

+44 (0)20 7425 8000

RBC Capital Markets                                                                            

Oliver Hearsey / Elliot Thomas / Ezzedine Ben Frej

+44 (0)20 7653 4000

Robey Warshaw

Simon Robey

+44 (0)20 7317 3999

J.P. Morgan Cazenove

Chetan Singh / James Robinson

+44 (0)20 3493 8000

Sources and Bases

The implied value per Direct Line Group share per the Latest Proposal, as at closing on 8 March 2024, is based on the cash component of the Latest Proposal (120 pence), the Ageas share price of €38.91, being the closing price on 8 March 2024, and a Euro to Sterling exchange rate of 0.8514.

The implied value per Direct Line Group share per the first proposal, as at closing on 8 March 2024, is based on the cash component of the first proposal (100 pence), the Ageas share price of €38.91, being the closing price on 8 March 2024, and a Euro to Sterling exchange rate of 0.8514.

Further information

This announcement is not intended to and does not constitute an offer to buy or the solicitation of an offer to subscribe for or sell or an invitation to purchase or subscribe for any securities or the solicitation of any vote in any jurisdiction. The release, publication or distribution of this announcement in whole or in part, directly or indirectly, in, into or from certain jurisdictions may be restricted by law and therefore persons in such jurisdictions should inform themselves about and observe such restrictions.

Goldman Sachs International, (“Goldman Sachs”) which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority in the United Kingdom, is acting exclusively for Direct Line Group and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Direct Line Group for providing the protections afforded to clients of Goldman Sachs International, or for providing advice in relation to the matters referred to in this announcement.

Morgan Stanley & Co. International plc ("Morgan Stanley"), which is authorised by the Prudential Regulation Authority ("PRA") and regulated by the PRA and the Financial Conduct Authority ("FCA") in the United Kingdom, is acting exclusively for Direct Line Group and for no one else in connection with the possible offer and neither Morgan Stanley nor any of its affiliates, nor their respective directors, officers, employees or agents will be responsible to anyone other than Direct Line Group for providing the protections afforded to its clients or for providing advice in relation to the possible offer, the contents of this announcement or any other matters referred to in this announcement.

RBC Europe Limited, which is authorised by the Prudential Regulation Authority ("PRA") and regulated by the PRA and the Financial Conduct Authority ("FCA") in the United Kingdom, is acting exclusively for Direct Line Group and for no one else in connection with the possible offer and neither RBC Europe Limited nor any of its affiliates, nor their respective directors, officers, employees or agents will be responsible to anyone other than Direct Line Group for providing the protections afforded to its clients or for providing advice in relation to the possible offer, the contents of this announcement or any other matters referred to in this announcement.

Robey Warshaw LLP, which is authorised and regulated in the United Kingdom by the FCA, is acting as financial adviser exclusively for Direct Line Group and no one else in connection with the matters referred to in this announcement and will not regard any other person as its client in relation to the matters referred to in this announcement and will not be responsible to anyone other than Direct Line Group for providing the protections afforded to clients of Robey Warshaw LLP, nor for providing advice in relation to the matters referred to in this announcement.

J.P. Morgan Securities plc, which conducts its UK investment banking business as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), is authorised in the United Kingdom by the Prudential Regulation Authority ("PRA") and regulated  in the United Kingdom by the PRA and the Financial Conduct Authority. J.P. Morgan Cazenove is acting as financial advisor exclusively for Direct Line Group and no one else in connection with the matters set out in this announcement and will not regard any other person as its client in relation to the matters set out in this announcement and will not be responsible to anyone other than Direct Line Group for providing the protections afforded to clients of J.P. Morgan Cazenove or its affiliates, nor for providing advice in relation to the matters set out in this announcement or any other matter or arrangement referred to herein.

Dealing Disclosure Requirements

Under Rule 8.3(a) of the Code, any person who is interested in 1% or more of any class of relevant securities of an offeree company or of any securities exchange offeror (being any offeror other than an offeror in respect of which it has been announced that its offer is, or is likely to be, solely in cash) must make an Opening Position Disclosure following the commencement of the offer period and, if later, following the announcement in which any securities exchange offeror is first identified. An Opening Position Disclosure must contain details of the person’s interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s). An Opening Position Disclosure by a person to whom Rule 8.3(a) applies must be made by no later than 3.30 pm (London time) on the 10^th business day following the commencement of the offer period and, if appropriate, by no later than 3.30 pm (London time) on the 10^th business day following the announcement in which any securities exchange offeror is first identified. Relevant persons who deal in the relevant securities of the offeree company or of a securities exchange offeror prior to the deadline for making an Opening Position Disclosure must instead make a Dealing Disclosure.

Under Rule 8.3(b) of the Code, any person who is, or becomes, interested in 1% or more of any class of relevant securities of the offeree company or of any securities exchange offeror must make a Dealing Disclosure if the person deals in any relevant securities of the offeree company or of any securities exchange offeror. A Dealing Disclosure must contain details of the dealing concerned and of the person’s interests and short positions in, and rights to subscribe for, any relevant securities of each of (i) the offeree company and (ii) any securities exchange offeror(s), save to the extent that these details have previously been disclosed under Rule 8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies must be made by no later than 3.30 pm (London time) on the business day following the date of the relevant dealing.

If two or more persons act together pursuant to an agreement or understanding, whether formal or informal, to acquire or control an interest in relevant securities of an offeree company or a securities exchange offeror, they will be deemed to be a single person for the purpose of Rule 8.3.

Opening Position Disclosures must also be made by the offeror company and by any offeree and Dealing Disclosures must also be made by the offeror company, by any offeree and by any persons acting in concert with any of them (see Rules 8.1, 8.2 and 8.4).

Details of the offeror and offeree companies in respect of whose relevant securities Opening Position Disclosures and Dealing Disclosures must be made can be found in the Disclosure Table on the Takeover Panel’s website at www.thetakeoverpanel.org.uk, including details of the number of relevant securities in issue, when the offer period commenced and when any offeree was first identified. You should contact the Panel’s Market Surveillance Unit on +44 (0)20 7638 0129 if you are in any doubt as to whether you are required to make an Opening Position Disclosure or a Dealing Disclosure.

Publication on website and hard copies

A copy of this announcement and the documents required to be published by Rule 26 of the Code will be made available, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on the Company’s website at directlinegroup.co.uk by no later than 12 noon (London time) on the business day following the date of this announcement. For the avoidance of doubt, the contents of those websites are not incorporated into and do not form part of this announcement.