Esure shares soar on £1 billion sale speculation
Sir Peter Wood is reportedly in talks with would-be buyers in a move that could trigger a full-blown sale of the business.
Shares in motor insurer esure have soared following reports the firm’s biggest stakeholder is looking to sell.
Sir Peter Wood, who owns a 30.7% controlling position, has been in talks with would-be buyers in a move that could trigger a full-blown sale of the business, according to the Sunday Times.
Shares rose more than 5% in morning trading on the London Stock Exchange as traders reacted to the speculation.
Sir Peter is reported to have held “informal” discussions over a possible sale, with an eye to having a deal in place next month.
An American insurance company is seen as the most likely buyer for the 71-year-old’s portion, despite interest from private equity firms, the report suggests.
The firm, which has a market capitalisation of £1.2 billion, saw price comparison site Gocompare demerge from the company and list on the stock market on November 3 last year.
Shore Capital analyst Eamonn Flanagan said: “We note the speculation in yesterday’s Sunday Times that Peter Wood was looking to sell his c31% stake in esure, which may then lead to a bid for the whole group.
“The article references potential interest from the US and private equity firms.
“The idea that Peter Wood might be considering an exit too does not surprise us.
“The forthcoming reversal of the Ogden discount rate moves is likely to lead to a rate war, as previously impacted companies seek to regain the market share they lost these past six months to the likes of esure and Hastings.”
Esure, which owns brands such as Sheilas’ Wheels, announced in August that first-half profits had surged off the back of rising prices and higher demand for its products.
The firm said that pre-tax profits rose 44.6% to £45.1 million in the six months to June 30.
Gross written premiums grew 22.8% to £393.3 million in the period as boss Stuart Vann hailed a “great start to 2017”.