Aviva expects to get 381 million pounds from selling a quarter if its stakes in Delta Lloyd, prompting speculation it could sell the entire holding.
Aviva said it would sell 25 million Delta Lloyd shares at 17.25 euros per share to institutional investors in a private placement, cutting stakes to 43 %, down from 58 %.
Shares in Delta Lloyd were down 7.2 % at 17.62 euros by 1015 GMT, reflecting speculation the British insurer could follow up with further sales. Aviva shares were 1.9 % lower.
“The sale confirms that Delta Lloyd is no longer a strategic stake to Aviva and that a further sale – and thus share overhang -is possible,” KBC Securities analyst Dirk Peeters said in a research note.
Aviva acquired Delta Lloyd in 1973, but offloaded a third of its 92 % holding in a Nov. 2009 IPO after an unsuccessful attempt to challenge corporate governance rules which severely limited its control over its Dutch subsidiary.
The British insurer, which operates in about 30 countries worldwide, said last month that the Benelux region was among 18 markets that it was “de-emphasising” as part of a plan to refocus on the territories where it is most profitable.
Aviva’s decision to reduce its stake in Delta Lloyd, a big investor in corporate bonds and mortgage loans, will also make the British insurer less vulnerable to credit risk, analysts said.
“The deconsolidation will help reduce Aviva’s above average risky asset exposure. We view the remaining stake as an equity investment which will be sold down entirely over time,” Jefferies analyst James Shuck wrote in a note.
Aviva had announced its intention to sell the Delta Lloyd shares on Monday, saying it would hold the proceeds in cash, improving its liquidity and giving it more financial flexibility.
