RSA’s pension deficit will now be shouldered by Canada
(Picture: Unsplash)Much as you have to respect the job Stephen Hester’s done on RSA, one detects no big public clamour to stop the historic insurance giant being broken up by foreign hands.
The result of a disappointing mishmash of mergers, it ended as a group of operations in the UK, Canada and Nordics not big enough anywhere to dominate.
As chief executive, Hester turned it around after a series of blunders by his predecessors so it at least ran smoothly.
But it’s been up for sale for years. Zurich almost bought it in 2014.
The factor putting off bidders was the sprawl of the thing, which doesn’t fit neatly into any one buyer.
So plaudits to the bankers and executives who assembled the neat carve up agreed by RSA’s board today. Two bidders will now split the thing geographically and take the bits they each want.
A concern had been that RSA pensioners might be legged over.
The group has a pension deficit of £468 million, which is no chump change in anyone’s money.
But the Canadian end of the bid team — an insurer called Intact — today agreed to shoulder that liability. Sporting behaviour.
RSA’s activist investor Cevian, its biggest shareholder, has accepted the offer, and with a premium of 51% to its pre-bid share price, others should too.
Hester will walk away with £8 million from his shares but few investors will grumble: he sells RSA for twice what it was worth when he arrived.
The question is, where does he land next?
Having seen him do a decent job at British Land, RBS (arguably) and RSA, Lloyds shareholders must hope he pitches up there.
