Aviva share price continues uptrend as Friends Life takeover completes

on Apr 14, 2015
Updated: Oct 21, 2019

Shares in Aviva Plc (LON:AV) have continued to trade in positive territory in today’s session, building on yesterday’s gains, with investors cheering the completion of the takeover of Friends Life. Analysts have also been upbeat on the enlarged company’s prospects with Barclays, Morgan Stanley and JP Morgan all issuing overweight ratings on the stock.

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As of 09:54 BST, Aviva’s share price had added 0.36 percent to stand at 563.50p, outperforming the benchmark FTSE 100 index which has slipped into the red this morning. Aviva’s shares rose more than one percent yesterday which marked the first day of trading following completion of the merger with Friends Life.
Aviva announced yesterday in a statement that almost 1.1 billion new Aviva shares had been admitted to the London Stock Exchange, taking the company’s total number of issued shares to around 4.05 billion. The blue-chip group announced its £5.6 billion deal with Friends Life in December last year, in the wake of the UK government’s annuity reform which put pressure on pensions providers.
While some investors and analysts initially flagged concerns over the proposed deal, sending shares in both FTSE 100 companies lower, sentiment has since improved. The Times yesterday quoted Jon Hocking, at Morgan Stanley, as writing that Aviva’s shares which have rallied by 50 percent since Mark Wilson took over as chief executive were still trading at a “material discount” to European peers such as Axa, of France, and Allianz, of Germany.
Barclays, which advised Friends Life on the deal, called the acquisition “a transformational deal for Aviva,” as quoted by the Guardian. The analysts added that they believed that “the acquisition of the cash generative Friends will make Aviva a dividend stock again,” and forecast a dividend of 29.5p in 2017.
As of 10:30 BST, Tuesday, 14 April, Aviva plc share price is 564.75p.


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