DIRECT LINE has rejected a raised takeover offer made by Belgian insurer Ageas valuing it at around £3.2bn earlier this month, calling it "uncertain, unattractive" and "highly opportunistic".

In a statement to the market yesterday, the British firm said it received a higher offer from Ageas on 9 March, implying a three per cent raised valuation at 237p per share.

The deal would have netted shareholders 120p per share in cash and one newly issued Ageas share for every 28.4 Direct Line shares they own.

The Belgian company previously made an offer in January that valued the company at around £3.1bn. The 233p per share offer was a premium of 43 per cent. Analysts at Jefferies said Ageas would have to make an offer of between 270p and 300p to be in with a greater chance of success.

Direct Line's board again voted unanimously to reject Ageas' second offer.

"The board considered the latest proposal with its advisers and continues to believe the latest proposal is uncertain, unattractive, and that it significantly undervalues Direct Line Group and its future prospects while also being highly opportunistic in nature," the company said in a statement.

It added that it was confident in the group's "standalone prospects". Direct Line is due to report its full-year results on 21 March and update investors on its turnaround plan.

Ageas has until 27 March to announce a firm intention on whether to make another offer.

Hans De Cuyper, CEO of Ageas, said on Wednesday: "We have made a compelling possible offer that represents a substantial premium to Direct Line's undisturbed share price.

"We look forward to engaging with the Direct Line board of directors on the terms of our improved possible offer."

Shares in Direct Line closed down 4.34 per cent.

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