RSA share price: Insurer unveils results from rights issue

on Apr 10, 2014
Updated: Apr 9, 2020
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iNVEZZ.com, Thursday, April 10: RSA Insurance Group (LON:RSA) has unveiled the outcome of its £773 million rights issue, reporting that just under 96 percent of the shares have been snapped up by shareholders. The insurer launched the cash call last month in an attempt to shore up its balance sheet.

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RSA’s share price has added about one percent in London this morning.
**RSA announces rights issue outcome**
RSA Insurance said today in a statement to the London Stock Exchange that it had received valid acceptances for about 95.67 percent of the shares to be issued pursuant to the group’s three for eight rights issue.
RSA’s chief executive Stephen Hester said in the statement that he was “very pleased with the successful outcome” of the offering.

“We have the tools needed to ensure that RSA fulfils its potential and delivers value for our customers and shareholders,” he added. “Our focus is on implementing the strategic and operational changes outlined in February; the targets we have set and managing RSA with clarity, determination and effectiveness.”
Hester, the former chief executive of the Royal Bank of Scotland Group Plc (LON:RBS), in February unveiled a plan to strengthen the FTSE 100 insurer’s finances by more than £1.1 billion through the discounted rights issue and a series of other ‘self-help’ measures. (RSA share price slumps as Group unveils ‘disappointing’ full-year results) RSA also scrapped its final dividend for 2013 after posting a full-year pre-tax loss of £244 million due to an accounting scandal at its Irish unit, reserve strengthening and adverse weather during the fourth quarter.

The troubled insurer launched the rights offering last month at 56.00p per share, representing a discount of about 40 percent to RSA’s closing share price on March 24. (RSA share price: Insurer launches ₤773 million rights issue)

**Analysts on RSA Insurance**
Yesterday, analysts at Sanford C. Bernstein reiterated their ‘outperform’ rating on the FTSE 100 insurer with a price target of 105p. Last week, WH Ireland reaffirmed its ‘market perform’ rating on the stock without specifying a price target, while Goldman Sachs, which has a neutral’ rating on the company, boosted its price target from 84.33p to 92p.
RSA Insurance currently has a consensus ‘hold’ rating and an average price target of 100.58p.
**As of 08:52 BST, buy RSA shares at 94.80p.**
**As of 08:52 BST, sell RSA shares at 94.70p.**

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