European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

UK insurer <a href="https://www.smartkarma.com/entities/rsa-insurance-group-plc" target="_blank" data-smartkarma-citation="entities:1055:1" rel="noopener">Rsa Insurance (RSA LN)</a> soared 45% on 5 November and led the Stoxx 600 gains on rumors of takeover. RSA later published a <a href="https://www.rsagroup.com/media/4163/rsa-insurance-group-plc-statement-regarding-proposal.pdf" target="_blank" rel="noopener">statement</a> regarding the proposal and a <a href="https://www.rsagroup.com/media/4164/rsa-insurance-group-plc-further-statement-regarding-proposal.pdf" target="_blank" rel="noopener">further statement</a>. Under the proposal, Intact would pay c. £3.0 bn and Tryg would pay c. £4.2 bn. RSA said that its Board "would be minded to recommend the proposal".
<ul>
<li>
693p per share in total.
</li>
<li>The proposed consideration represents 15.9x P/Forward EPS, 1.75x on RSA's H1 reported BVPS, 1.74x P/Next FY BVPS, 2.1x RSA's net tangible asset value. </li>
<li>On a Forward P/E basis, the implied valuation is 682p (15.4x) vs an offered consideration of 693p (including interim dividend).</li>
<li>A generous exit price for RSA's shareholders.</li>
</ul>
RSA is positioned in attractive P&amp;C markets like Canada and Scandinavia where greenfield entry strategies would be difficult to pursue, and its scale position in the UK gives rise to potential synergies.
At last closing price, the deal offers an interesting gross spread of 6.35% for a deal that although carries execution risk, it is one everybody seems happy with. Recommendation is LONG RSA.

UK insurer Rsa Insurance (RSA LN) soared 45% on 5 November and led the Stoxx 600 gains on rumors of takeover. RSA later published a statement regarding the proposal and a further statement. Under the proposal, Intact would pay c. £3.0 bn and Tryg would pay c. £4.2 bn. RSA said that its Board "would be minded to recommend the proposal".


693p per share in total.

The proposed consideration represents 15.9x P/Forward EPS, 1.75x on RSA's H1 reported BVPS, 1.74x P/Next FY BVPS, 2.1x RSA's net tangible asset value. 
On a Forward P/E basis, the implied valuation is 682p (15.4x) vs an offered consideration of 693p (including interim dividend).
A generous exit price for RSA's shareholders.

RSA is positioned in attractive P&amp;C markets like Canada and Scandinavia where greenfield entry strategies would be difficult to pursue, and its scale position in the UK gives rise to potential synergies.
At last closing price, the deal offers an interesting gross spread of 6.35% for a deal that although carries execution risk, it is one everybody seems happy with. Recommendation is LONG RSA.

RSA - Intact Financial & Tryg: Generous Break-Up Takeover Proposal

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Concerns over perceived U.S. central bank policy missteps have been somewhat alleviated following dovish takeaways from Fed Chair Powell’s comments this week. However, trade tensions remain a concern for global markets despite optimism surrounding the Trump/Xi meeting at the G20 summit this week. Therefore, our outlook remains cautious and we expect consolidation to continue as global equities enjoy a bounce off of recent lows. Ultimately, we will need to see more definitive signs of bottoming throughout Europe, Asia, and the U.S. before getting positive on global equities.  We provide a technical appraisal of major markets and highlight attractive set ups in global transportation, communications, and financial sectors

Concerns over perceived U.S. central bank policy missteps have been somewhat alleviated following dovish takeaways from Fed Chair Powell’s comments this week. However, trade tensions remain a concern for global markets despite optimism surrounding the Trump/Xi meeting at the G20 summit this week. Therefore, our outlook remains cautious and we expect consolidation to continue as global equities enjoy a bounce off of recent lows. Ultimately, we will need to see more definitive signs of bottoming throughout Europe, Asia, and the U.S. before getting positive on global equities.  We provide a technical appraisal of major markets and highlight attractive set ups in global transportation, communications, and financial sectors

Global Equity Strategy: Bouncing off Lows, China Perking Up

Denmark

Tryg A/S offers general insurance services.  The Company operates in Sweden, Denmark and Norway. Tryg sells general insurance products in private lines, commercial and corporate. The Company's subsidiary sells guarantee insurances in the Nordic region.

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Tryg A/S (TRYG DC)

RSA - Intact Financial & Tryg: Generous Break-Up Takeover Proposal

At last closing price, the deal offers an interesting gross spread of 6.35% for a deal that although carries execution risk, it is one everybody...

Jesus Rodriguez Aguilar

Global Equity Strategy: Bouncing off Lows, China Perking Up

Concerns over perceived U.S. central bank policy missteps have been somewhat alleviated following dovish takeaways from Fed Chair Powell’s comments...

Vermilion Research

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