European Event-Driven Analyst

Jesus Rodriguez Aguilar

Jesús is an Insight Provider (Event-driven) on the Smartkarma network, where he looks across sectors at opportunities arising from securities mispricing (both credit and equity), share classes, bid announcements, prospective bids, and special situations. He has served as Economic and Business Advisor at the Spanish Congress in Madrid. Prior to that, he has worked in the City of London: as a Credit Analyst at Bloomberg; Event-driven associate at former boutique European Research; and doubled as Special Situations and Equity-linked VP (convertible bonds) at Merrill Lynch. Jesús has an MBA from the London Business School, a BA (Hons.) degree in Economics from the Complutense University in Madrid, and a BA (Hons.) in Law from U.N.E.D., also in Madrid.

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

RSA Insurance

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