UK-based RSA Insurance Group is weighing a joint £7.2 billion ($12 billion) all-cash takeover offer from Canada’s Intact Financial Corporation and Tryg A/S of Denmark.

The insurer, known until 2008 as Royal & SunAlliance, told shareholders last week it was “engaged in discussions” with the Canadian-Danish consortium about the proposed deal.

However, it cautioned “there can be no certainty” that the offer would be accepted, citing a number of matters that need to be considered first before the proposal can progress to the next stage.

“The Board of RSA has indicated to the consortium that it would be minded to recommend the proposal, subject to satisfactory resolution of the other terms of the possible offer, including a period of due diligence,” the UK insurance group said.

“The proposal is subject to the satisfaction or waiver of pre-conditions relating to, amongst other things, due diligence, the recommendation of the Board of RSA, the support of RSA’s pension fund trustees and board approvals from Intact, Tryg and TryghedsGruppen.”

Under the proposed offer, Intact will pay £3 billion ($5.4 billion) and Tryg £4.2 billion ($7.6 billion) for the UK business. Intact will retain RSA’s Canada and UK & International operations and obligations, Tryg would keep the operations in Sweden and Norway and the business in Denmark will be jointly owned.

Intact and Tryg say the acquisition is “strategically compelling” for their existing insurance operations.

RSA was the result of a series of mergers of three UK-owned insurers – Royal, Sun and Alliance – which could trace their involvement in Australia back to the 1830s.

As Royal & SunAlliance it was a major player in the Australian general insurance market until it sold its local assets via a $2 billion capital-raising led by (now QBE Chairman) Mike Wilkins. This resulted in the formation of Promina in 2003.

Promina, which included AAMI and Vero among its assets, was acquired by Suncorp in 2006 for $7.9 billion.