Is Aviva a potential breakup target?
The fallout from last week's announcement that Aviva had been approached by rival UK insurance company RSA about a potential buyout of the company's general insurance operations continues this week. A number of parties have now stepped forward to suggest they may be interested in parts of the Aviva operations should the company decided to sell off "non-core" assets. So is Aviva a potential takeover target?
There is no doubt that the relationship between the Aviva management and institutional shareholders is very strained because of the refusal to make public the approach from RSA. Whether or not it was the correct move to block a potential sale of the operation is open to question but a potential offer in the region of £5 billion is surely something which should have been discussed more openly?
There is now growing concern that this particular episode could cost Aviva its very independence with a number of potential bidders said to be circling the company. It will be interesting to see how the Aviva management respond over the coming days and weeks and indeed whether the relationship with institutional shareholders can be improved and resurrected. The support of institutional shareholders is vital to the long-term independence of any quoted company.
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