13th Aug 2018 12:31
LONDON (Alliance News) - esure Group PLC shares jumped by a third on Monday after the insurer confirmed it had received an unsolicited takeover proposal from Bain Capital Private Equity LP.
Shares in the FTSE 250-listed insurance company were up 31% Monday at 267.00 pence each.
Bain Capital and esure are in the "advanced stages" of discussing a possible offer for the entire 419.1 million issued and to be issued share capital of the company, esure said.
Bain Capital has submitted a proposal to acquire esure at a price of 280 pence per share in cash. Shares in esure were up 29% Monday in midday trading at 263.40 pence each.
The offer values the insurance company at GBP1.17 billion. Esure said it "would be minded" to recommend the offer set out in the proposal if Bain Capital made a firm offer at that price.
The proposal represents a premium of 40% to the one-month volume-weighted average price of 199p and about 29% to the three month volume weighted average price of 216p.
Bain Capital has until September 10 to decided if it wants to make a firm offer or not.
In January, esure parted abruptly with its chief executive, Stuart Vann, saying this was by mutual consent. Darren Ogden, formerly finance head, took interim CEO role and remains in that role.
With Vann at the helm, esure had launched a footprint expansion programme in its Motor insurance segment and the business remains on track to deliver the targeted 3 million in-force policies by 2020.
In March, esure reported its full year gross earned premiums in 2017 rose 25% to GBP820.2 million in 2017 from GBP655.0 million in 2016, with total income growing to GBP781.3 million from GBP647.5 million.
This led to a pretax profit of GBP98.6 million, up 36% from GBP72.1 million in 2016. During the year, in-force policies rose to 2.4 million in 2017.
In May, the insurer reported 18% growth in first-quarter gross premiums. However, it said that the "Beast from the East" and "Storm Emma" winter events in the UK resulted in GBP8 million of claims costs in its home insurance division.
Esure recorded total gross premiums of GBP221.2 million for the three months to March-end, up from GBP187.4 million in the year ago period. In-force policies grew 9.2% to 2.4 million from 2.2 million.
Related Shares:
Esure Group