ALEX BRUMMER: The fight for Direct Line as predator prowls

Revitalizing London stock markets so that they are more willing and able to support UK startups and nurture British businesses is central to Jeremy Hunt’s agenda as Chancellor.

The UK ISA idea, revealed in the Budget, is part of a wider effort to support UK actions, which includes greater transparency in pension fund investments.

The idea of ​​capturing British pension money to support UK technology, such as green technologies, is also on shadow chancellor Rachel Reeves’ growth menu.

The focus on British-listed shares comes at a time when several FTSE 350 companies are under siege from foreign buyers. In all cases, the premium seems generous.

But we must not forget that London has wrongly suffered a Brexit discount compared to New York and other financial markets, despite the City and business services leading the world. There are good reasons to think that cyclical discounting will disappear over time.

That is why it is increasingly imperative that UK boards show dogged determination in rejecting opportunistic acquisitions, especially of companies with unclear ownership. A key brand of insurer Direct Line is Churchill with its famous bulldog logo. It is up to the group’s chair, Danuta Gray, to show her Yorkshire courage and see Belgian invader Ageas off the battlefield following the launch of a £3.1bn bid.

It’s easy to dismiss Direct Line as just another general insurer in a crowded field where comparison sites have opened up competition. That’s ignoring a special place in the UK market.

As a subsidiary of the Royal Bank of Scotland, set up by serial insurance innovator Peter Wood, it was a turning point.

When he came up with the idea of ​​dealing directly with consumers over the telephone, he broke with the old practice of middlemen placing policies and the distortions of commission structures.

It is ironic that, having broken the mold, Direct Line has been undermined by regulatory breaches and by not moving quickly enough into the digital world.

The arrival about a week ago of Aviva’s Adam Winslow as chief executive should encourage investors that if Direct Line modernized its systems and simplified branding options, a wounded company could recover.

Direct Line also benefits from a share registry where respected UK funds Schroder and Liontrust could help thwart an unwanted deal.

Too often, short-term performance decides these matters and big investors are happy to take the cash and run.

In the current political atmosphere, when it is so important to support London markets and asset management, UK institutions must show patience and fortitude or face the wrath of Whitehall.

The bidder Ageas presents himself as a good owner with a lot of insurance experience. But it’s more complicated than that. One of his previous UK businesses, the Kwik-Fit (UK) property, which offered car and home insurance, ended up in the High Court amid accusations by Ageas that he had overpaid. .

The Ageas property also needs to be closely examined. The insurer emerged from the trans-European financial group Fortis, rescued from the great financial crisis.

Current shareholders include the opaque Chinese holding company Fosun, and the Belgian government still owns a small stake.

No matter how honorable Ageas’ intentions may be, leaving the fate of 10 million customers in those hands does not fill with confidence.

It is silly that the UK, with a history in insurance stretching back to the coffeehouses of the 17th century, is so indifferent to its legacy.

There is also reason to be unhappy about the way Spirent’s telecoms board, headed by Sir Bill Thomas, a Labor Party small business adviser, so quickly accepted an offer from an American competitor, Viavi.

Valuable British technology and R&D should not be sacrificed so easily.

Corporate presidents too easily ignore the national interest.