Delta LloydNV's boards rejected NN Group NV's unsolicited offer to the company at a price of €5.30per ordinary share, saying the proposal "substantially undervalues"Delta Lloyd.
"We have made good progress during 2016. Our capitalposition is now solid with opportunity to improve further capital generation anddividends. In light of this, we cannot accept this proposal,"said Delta Lloyd executive board Chairman Hans van der Noordaa.
Delta Lloyd said the terms of NN Group's proposed offerrepresent only 0.64x its book value as of June 30, while the 29% premium overDelta Lloyd's closing stock price Oct. 4 is "below market norms for cashtransactions of this type and for companies at our stage ofrecovery."
The company also tagged NN Group's proposal as opportunisticin timing in light of Delta Lloyd's progress on its strategy, saying NN Groupseeks to take control before its shareholders, customers and employees havefully benefitted from the progress. In addition, Delta Lloyd said the proposalfails to reflect an appropriate share of benefits from combining Dutchinsurers, saying its shareholders are in a position to benefit from a number ofother possible combinations now or in the future.
Delta Lloyd said its boards believe the company can createsubstantial value for shareholders through the implementation of its currentstrategy, noting that it has "a clear plan" to improve its life newbusiness margins and property and casualty combined ratio and implementcost-saving targets of about €60 million by 2018, among others.