What happened? Following the announcement that Aviva had made a GBP2.50 approach for DLG on the night of the 27th, we have been speaking with investors to discuss the potential outcomes and merits of any potential transaction (see our write-up here). Below we share key areas of debate: . Aviva rationale: Many investors seemed surprised that Aviva have made an approach at this stage: a) management seemed to downplay their potential interest in acquiring DLG earlier this year, b) management have seemed to indicate their focus would be on bolt-on deals; c) if anything, the pricing outlook has deteriorated since March; d) UK personal lines is probably not the area of the business on which investors were expecting the group to double-down. So some investors were wondering what had changed. Part of the answer, we think, may have simply been that Aviva management were busy with other transactions back in March (AIG Life, Probitas) and so were not in a position to consider another transaction. One hypothesis shared with us was that Aviva itself might want to avoid being an acquisition target, and so acquiring DLG was a defensive move: however, we find this unlikely, both because Aviva is not an obvious target, and also because a DLG transaction would not be large enough to change the equation for any hypothetical acquiror of Aviva. . DLG rationale: given the substantial premium offered by Aviva, investors were asking what one had to believe to think that DLG were right to reject it. As we discuss in What''s not in the price?, we think a bluesky scenario, in which DLG hits their NIM targets and restores their multiple, could result in a GBP3.20 share price in 2026. If the present value of this would be GBP2.60, a typical acquisition premium on top of that would result in a ''fair'' acquisition price GBP3 /share. Investors roughly agreed with this logic, while also pointing to the fact that this squarely depends on the company both hitting their targets (which the...