Aviva set to grab Direct Line after lifting bid price

(Sharecast News) - Direct Line on Friday said it was ready to accept an increased offer from rival Aviva of 275 a share, valuing the company at £3.6bn. It last week rejected a 250p cash and share offer.

The company reiterated that it was confident of its prospects as a standalone operation, but after considering the new offer with advisers and consulting with shareholders it decided the latest bid was at a value that it could recommend acceptance.

Direct Line shareholders would own approximately 12.5% of the issued and to be issued share capital of Aviva. The Direct Line board believes that, in addition to the attractive headline value per share, the combination would provide the opportunity to deliver significant synergies, creating substantial additional value for both sets of shareholders," the company said in a statement.

Aviva has until 1700 GMT on Christmas Day to make a firm offer under UK takeover rules.

Reporting by Frank Prenesti for Sharecast.com