Aviva’s executives are feeling the heat from its seemingly angered shareholders after a bid of for the general insurance division of the personal and business insurance provider was turned down.
After the £5 billion offer from the RSA Insurance Group, made when its chairman, John Napier, wrote a personal letter to Aviva, the latter company turned it down while neglecting to either informing the market of the interest or consulting with Aviva shareholders concerning the possible transaction. Shares of the insurance provider, which offers brokerage services for small business insurance, increased by a factor of 5 per cent last Friday when the media revealed the details of RSA’s desires.
One of Aviva’s shareholders was visibly upset by the company’s behaviour that such a significant offer was not brought to the attention of both himself and Aviva’s other investors when recently interviewed by the Sunday Telegraph.
On a personal level, the shareholder was quick to admit that the offer was not sufficiently high. but was very clear in stating that the omission of any consultation with its investors was a “lacklustre move” on the part of Aviva, especially in light of the company’s tepid share performance throughout the most recent years.
In a related story, the Sunday Times reported that a small group iof Aviva’s shareholders (which may include Standard Life Investments within their ranks) has been recently demanding the company to undertake a complete strategic review in regards to examining the potentiality of a business break-up.
While Aviva, at an approximate 15 per cent of the UK’s general insurance market share, is considered the largest of its kind in Britain, nearly 70 per cent of its global profits originate from pensions and life insurance.
In anticipation of the bid for the company, the CEO of RSA, Andy Haste, spearheaded its efforts to underwrite the £5 billion needed to purchase Aviva by lining up three investment banks.