Shares in Direct Line plummeted on Monday as markets opened for the first time after potential suitor Ageas said it would not bid to buy the company.
The insurance company was trading down as much as 15.8% during the morning as investors reacted to the news, which was released on Friday evening.
On Friday, Ageas, a Belgian insurer which is headquartered in Brussels, said that after being unable to “engage with” Direct Line’s board despite two attempts, it “will not make an offer” to buy the firm.
Shares in Direct Line soared last month as it revealed it had rejected a takeover approach from its Belgian rival.
Ageas said it had sent an initial proposal to Direct Line on January 19, then improved its bid on March 13.
“Throughout the entire process, Ageas has always sought engagement with Direct Line’s board,” the would-be bidder said on Friday.
“Ageas regrets that it has not been able to work collaboratively together with the board of directors of Direct Line towards a recommended firm offer.
“Ageas was not able to identify additional elements based on publicly-available information that would justify significant adjustments to the terms of its possible offer.
“Therefore, consistent with its financial discipline, Ageas has decided not to make a firm offer.”
Ageas chief executive Hans De Cuyper said: “I am convinced that given the circumstances we took the right decision not to make an offer, staying true to who we are and what we stand for in terms of maintaining a friendly approach and respecting our financial discipline.”