Australian investment bank returns after being rebuffed last year

In other takeover news, the Australian investment bank Macquarie has just agreed to buy the UK-listed waste management company Renewi for £700m.

Macquarie is paying 870p a share in cash, the companies said in a joint statement. It is billed as a “final possible offer”.

We are always cautious about the bidder’s curse, but we believe Aviva’s approach to Direct Line is strategically coherent, could offer considerable synergies, and is currently highly financially attractive.

The main risk for Aviva is that it seems to be stretching an already below-average solvency ratio, so any further generosity would need to come from shares. We can see an offer rising from the current 250p to around 300p.