One of many UK’s greatest insurers may get even larger as Direct Line seems to be set to just accept a sweetened £3.61bn takeover bid from Aviva.

It isn’t the primary time Aviva has tried to purchase Direct Line, which incorporates the Churchill and Privilege manufacturers. Final month its £3.3bn provide was rejected for being “extremely opportunistic” and was mentioned to have “considerably undervalued the corporate”.

The provide offers a 73.3% premium on Direct Line’s worth, primarily based on the closing value for its shares on Monday 18 November – the day earlier than the primary proposal was superior.

In an announcement to shareholders, Direct Line mentioned: “The board of Direct Line stays assured in Direct Line’s prospects as a standalone firm and continues to have conviction within the capabilities of the newly established management group to ship the introduced technique.”

It mentioned the board had “fastidiously thought of the proposal with its advisers and consulted with Direct Line shareholders throughout the provide interval” and had concluded “the proposal is at a price that it will be minded to suggest to Direct Line shareholders” ought to there be “a agency intention to make a suggestion”.

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If mixed the merged group would have a couple of fifth of the motor insurance coverage market.

Working collectively as one entity may ship “vital synergies” permitting the corporations to cooperate and generate extra worth collectively than individually, a joint assertion from the insurers mentioned.

The provide is just a proposal at current and the assertion mentioned there could be “no certainty” that any agency provide might be made.

Aviva has till Christmas Day to both announce a agency intention to make a suggestion or that it will not be making one in any respect.

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Direct Line’s inventory soared 40% as a result of takeover curiosity after the primary Aviva rebuff.

Having suffered within the motor insurance coverage sphere Direct Line fended off a £3.17bn takeover try by Belgian rival Ageas earlier this yr.

It is skilled rising declare prices, and stiff competitors, largely from online-only gamers with smaller price bases.

Earlier this month Direct Line revealed 550 job losses as a part of a “collection of initiatives” designed to slash £50m off its price base.