Belfast Telegraph

RSA's new boss Stephen Hester a relief for troubled organisation

By Jamie Dunkley

The decision to appoint Stephen Hester as RSA Insurance boss has reduced the likelihood of a takeover of the troubled group and a fire sale of any of its assets, analysts have claimed.

The former Royal Bank of Scotland chief executive was last night handed the task of salvaging RSA's reputation, following the discovery of a £200m black hole in its accounts last year.

His arrival – which takes place with immediate effect – has already been heralded across the Square Mile and led to RSA's shares yesterday gaining almost 6% to 104.9p, making it the biggest riser in the FTSE 100.

Analysts said the company was now likely to scrap its dividend when it reports later this month and announces the results of a strategic review of its operations.

Others have gone as far as suggesting a rights issue is now on the cards, as well as the sale of units.

Eamonn Flanagan at Shore Capital said: "Disposals are likely, but this time... we suspect that the exit valuations have increased considerably."

Belfast Telegraph