Car insurer Hastings is to be taken private after agreeing to a £1.7 billion takeover by a consortium involving the firm’s largest shareholder.
Shares in the firm surged on Wednesday morning after it confirmed the offer from South Africa’s Rand Merchant International, which is Hasting’s largest investor, and Finnish insurer Sampo.
The company board has agreed and recommended the deal but it still needs approval by company shareholders.
The cash offer will hand shareholders in the company 250p per share as well as an interim dividend of 4.5p per share.
Sampo said it had been eyeing an expansion outside of its core Nordic market and hopes the deal will also help it grow beyond its main life insurance market.
I am immensely proud of how the Hastings team has adapted and responded to Covid-19 to make sure we continue to do the right thingToby van der Meer, Hastings chief executive
Hastings confirmed the offer as it also reported a 31% jump in adjusted operating profits for the first half of 2020 to £78.3 million.
It said the improvement was driven by strong policy growth, while motor insurance claims also declined as policyholders stayed at home during the lockdown.
Toby van der Meer, chief executive officer of Hastings, said: “In regards to the business’ performance for the first half of 2020, I am immensely proud of how the Hastings team has adapted and responded to Covid-19 to make sure we continue to do the right thing.
“We have taken support measures and actions amounting to tens of millions of pounds during the pandemic, focused on our colleagues, customers and our local communities.
“We minimised interruption for our customers, with our colleagues able to work and serve customers from home within a few weeks of the Government’s lockdown being announced.”
Shares in the company were 17.2% higher at 252p.