Zurich says any RSA offer probably would be in cash
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Zurich Insurance Group Ltd. said Wednesday that any offer it may make for RSA Insurance Group P.L.C. likely would be made solely in cash.
Zurich on Tuesday had said it was considering an offer for London-based RSA.
Zurich said in a statement Wednesday that since any offer, if made, would likely be made in cash, it will not make any disclosures about Zurich securities under Rule 2.10 of the U.K.'s City Code on Takeovers and Mergers.
Analysts said that a deal could value RSA at between £5.5 billion and £6 billion ($8.53 billion and $9.31 billion).
In a note Wednesday, Sami Taipalus, an analyst at Berenberg Bank, said that while an acquisition of RSA would be positive for Zurich, provided it can achieve a “reasonable price,” any deal would not address market pressures.
“Unlike other recent transactions in the nonlife space, the acquisition of RSA would not do anything to strengthen Zurich's hand in the increasingly competitive U.S. and global commercial lines markets,” he said.
“This is not necessarily a problem, but there is a small risk that it could put the group at a disadvantage against more aggressive peers,” he added.
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