Blue Bidco to buy Esure
Esure has been given a takeover offer from Blue Bidco, appraising the insurer at £1.2bn, according to Insuranceage.
Independent directors of Esure and Bidco’s board have reached an agreement on the terms of a recommended cash offer, which values Esure at 280p per share.
The news was made public after Esure announced a 12% rise in gross written premiums to £440.3m for the first half of 2018. Regardless, the pre-tax profit fell to £36.1m, which Esure claimed included an influence of £14m from weather related claim costs.
The company’s combined operating ratio (COR) decreased to 100.9% in the first half of 2018, compared to 96.6% in the first six months of 2017. Also, the GWP in Esure’s motor business increased to £398.4m and its COR was 97.6%.
The company also stated that its independent directors believed the acquisition would bring many strategic benefits to the business.
It was rumoured last year that chairman Peter Wood, Esure’s largest shareholder, held informal discussions about selling his business shares.
Part of the agreement with Bidco, however, states that Peter will remain as chairman and will also reinvest £50m in the business.
Peter added, ‘I’m pleased to be announcing this transaction today, because it is a great outcome for shareholders, for the company, and for customers.
‘As a private company and with Bain Capital’s backing, Esure will be able to invest behind the innovation required to fully realise the opportunities in this market.’