Zurich Insurance Makes £5.6bn Bid For RSA

RSA, the owner of the More Than home and motor insurance brand, has had a £5.6bn takeover bid from Swiss rival Zurich.

The 550p-per-share offer equates to an 11% premium on Monday's closing price.

In early trading this morning RSA Group's share price only climbed by 5.1%, which suggests there is uncertainty around the likelihood of finalising the deal by the deadline of 22 September.

Zurich's bid needs to be completed by that deadline to comply with City takeover rules.

Sussex-based RSA, which is run by former Royal Bank of Scotland (LSE: RBS.L - news) boss Stephen Hester, had asked for the UK Takeover Panel to extend the initial deadline of 5pm today.

And RSA said its board had "indicated to Zurich that it would be willing to recommend an offer at the level of the possible offer to RSA shareholders".

Zurich has confirmed its proposed bid, but it said a firm offer was not guaranteed.

Many City analysts believe that two companies would be a good fit, with Zurich believed to be attracted by RSA's Scandinavian presence.

RSA shares are 18.6% higher so far this year, while Zurich has seen its share price fall nearly 16% over the same period.

Half-year results from RSA this month showed an 84% leap in group operating profits to £259m compared with a year ago.