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22 September, 2015
RSA Insurance (RSA) may have been jilted at the M&A alter by Swiss heavyweight Zurich Financial (ZURN), but soothing comments from CEO and ex-RBS boss Stephen Hester (summer trading above expectations) are doing the job of convincing investors that there is nothing wrong and that it ‘wasn’t us it was them’. With the company back on the dating scene, interest is being revived in the RSA turnaround story after a 20% retreat to below the 450p level they were pre-offer end-July. Zurich blames a $275m charge related to the Tianjin port explosion in China, problems with its US car insurance arm and recent deterioration in trading for pulling the plug on its 550p £5.6bn bid and the sector’s biggest example of potential consolidation in a while. With RSA saying all is fine, could the silver lining of the broken engagement be a second bite at the RSA cherry? The bounce from 18-month lows 390p suggests investors seeing value as the dust settles. Shares outperforming bloodied blue-chip peers.
Mike van Dulken, Head of Research
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
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