(Bloomberg) -- Zurich Insurance Group AG has arranged 5.5 billion pounds ($8.4 billion) in financing for the takeover of smaller rival RSA Insurance Group Plc, according to people with knowledge of the plan, signaling the Swiss insurer is getting closer to proceeding with a formal offer.
Zurich has arranged the loans through Morgan Stanley, Citigroup Inc., HSBC Holdings Plc, Deutsche Bank AG, UBS Group AG and Lloyds Banking Group Plc, the people said, asking not to be identified as the information is private. The company is still doing a due diligence process before making a formal offer for RSA, they said. The financing is a bridge facility, meaning Zurich would need to repay it probably by selling securities if the bid goes ahead, according to the people.
Zurich last month made a takeover proposal that would value RSA at about 5.6 billion pounds. That would make it the biggest acquisition in the industry in Europe this year. RSA is still trading below Zurich’s tentative offer of 550 pence a share, signaling investors may be concerned about the deal closing at that price.
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