Aviva to raise £318m from increased Delta Lloyd placing.

Aviva @ 292.70p, +8.10p (+2.85%).

Following yesterday's announcement of a new strategic plan from Aviva's newly installed Chairman, John McFarlane, the first piece appears to have placed on the board with a further announcement of its intention to sell a further stake in the Delta Lloyd Group.
The disposal, of 25m shares would leave Aviva carrying a reduced stake of 27% in Delta Lloyd.

However, things appear to be moving fast and following interest the company has upped the number of shares being sold to 37m from 25m originally. Which would further reduce Aviva's holding to 21%.
At Eu10.75 per share the proceeds amount to £318m which will be used to strengthen the company's balance sheet (Aviva announces pricing of offering of Delta Lloyd ordinary shares at €10.75 per share).

Despite yesterday's appreciative initial response the shares retreated from their midday peak (following MPC decision), as analysts began to absorb and assess the announcement against the company's recent track record under the previous CEO, Andrew Moss, who resigned following what amounted to a no-confidence vote at the AGM when shareholders voted against the company's remuneration proposals.

The general consensus yesterday and today is that the strategy will take time to enact but there is an appreciation of McFarlance honest assessment of the situation and the moves to address the weak share price and shareholder concerns.
As such the shares have bounced above yesterday's peak in early trade following the swift early move to capitalise on Delta Lloyd interest.

I have to say I like the fact that after just 2 months in the company the Executive Chairman appears to have moved quickly to outline his strategy, and has moved even quicker to enact it.
Although the unexpected loss of Andrew Moss means that there is an urgent need for direction and leadership it is still refreshing to see a Chairman step up to the plate (unlike BP, Barclays etc).
Its also positive to see such a swift early move and to maximise the opportunity.

By their very nature strategic plans are long term and as such provide a reference road map as to the company's direction. If bought into fully almost all company decisions can be matched up to the strategy so as to determine their viability, go/no-go.

So fair to say that the strategy will take time to reach its fruition but time is the company's most critical constraint given that the goal is to strengthen its capital position against financial threats. Unfortunately its difficult to see a bigger threat to the company than what is happening in Europe currently.
However, the Chairman has begun to establish a credible direction for the company as well as build some much needed positive momentum given the strategic review, announcement, and successful first disposal.

If Europe can hold itself together then the company has a fair chance of success.

Related article links:
- http://www.aviva.com: Aviva announces pricing of offering of Delta Lloyd ordinary shares at €10.75 per share
- http://www.guardian.co.uk: New Aviva chairman reassures City with radical overhaul of insurer

Earlier post:
- Aviva: Chairman John McFarlane announces new strategic plan.