RSA to keep 72% stake in Scandinavian insurer

Royal & Sunalliance, the UK-listed insurance group, has decided to hang on to its £775m stake in the Scandinavian group, Codan, after rejecting a string of bids over the past six months.

Royal & Sunalliance, the UK-listed insurance group, has decided to hang on to its £775m stake in the Scandinavian group, Codan, after rejecting a string of bids over the past six months.

RSA owns a 71.7 per cent shareholding in the insurance company, which is quoted on the Danish stock market. Only last year, RSA described the division as a "core" part of its business.

However, after putting the life division of Codan up for sale earlier this year, RSA entertained a number of enquiries for its stake in the overall group. Codan eventually sold its life business to SEB, the Swedish bank, in June for 3.3bn Swedish kronor (£240m), of which RSA received £173m.

RSA conceded that although it would have preferred to keep the remainder of the business, it felt it had a duty to shareholders to consider all options if bids were made for its stake.

It is believed four bidders made approaches to RSA for the remainder of the business. However, sources confirmed yesterday that the company had rejected the offers, as it felt they undervalued the business.

Codan shares fell more than 4 per centto 254 Danish kroner (£22.88), while shares in RSA closed down 1p at 70.5p.

RSA has been trying to exit the life business over the last year. Last month, it sold its closed UK life funds to Resolution Life for £850m.