Aviva offer looks to be opening shot in a negotiation – and Direct Line knows there will be a price at which it has to roll over

Prepare for the dance. Aviva is a big grown-up FTSE 100 insurer with a respected chief executive who doesn’t launch takeover offers on a whim; Amanda Blanc will have a strategy to go the distance. Direct Line, on the other hand, is a troubled FTSE 250 insurer with a new-ish chief executive, Adam Winslow, whose turnaround plan has not been applauded wildly by the stock market.

Aviva’s 250p-a-share, or £3.3bn, offer for Direct Line therefore looks to be the opening shot in a negotiation. The target’s board spouted the standard form of words – “highly opportunistic” and a “substantial” undervaluation – but will also know there will be a price at which it will be obliged by its own shareholders to roll over and talk terms. This tussle looks to be about where that price lies. Within a 270p-290p range, one suspects. Aviva starts as a heavy favourite to prevail.