RBC Capital upgrades Amlin on 'highly attractive' Sumitomo offer

8th Sep 2015 11:03

(ShareCast News) - RBC Capital Markets upgraded Amlin to 'sector perform' from 'underperform' and raised its price target to 675p from 435p on news the insurer has agreed to be bought by Japan's Mitsui Sumitomo Insurance Company for £3.47bn.RBC said: "The recommended cash offer for Amlin by Mitsui Sumitomo represents strong value for shareholders, in our view, at the highest takeout multiple seen in the sector in recent times."The Canadian bank said it doesn't see any obstacles to the deal going through as it's backed by some of Amlin's largest shareholders.It noted that Mitsui Sumitomo has received irrevocable undertakings to vote or procure votes in favour of the deal representing 15.2% of Amlin's issued share capital.RBC lifted its 2015 earnings per share estimate by 7.6% and said it no longer sees any reason for the stock to underperform.It based its valuation on the recommended offer price of 670p rounded to the nearest 25p increment.At 1108 BST, Amlin shares were up 32.45 at 652p.