US Insurer Accelerates Esure Stake Talks

Mark Kleinman, City Editor
US Insurer Accelerates Esure Stake Talks

The American insurance giant Travelers will accelerate talks in the coming days about buying a stake in esure, the motor insurer headed by Peter Wood, one of Britain's wealthiest entrepreneurs.

I have learnt that Travelers Companies Inc, which is among the biggest general insurers in the US, is in discussions about acquiring a minority stake in esure ahead of the UK company's likely flotation on the London Stock Exchange.

Talks between Mr Wood, who chairs esure, and Jay Fishman, the boss of Travelers, have been taking place for many months. The two men know each other well from Mr Wood's stint in the US, during which he founded the insurers Direct Response Corporation and Homesite.

Esure is expected to announce next week its intention to float, a move that is likely to value the company at more than £1bn.

It would follow the listing of Direct Line Group, which was also founded by Mr Wood and was partially-offloaded by the state-backed Royal Bank of Scotland late last year.

It is unclear how much of esure Travelers might seek to acquire, although it is unlikely to be more than a few per cent of the company.

People close to the situation said their discussions were ongoing and might not result in an agreement at all.

Esure was set up in 2000 and quickly became one of the country's fastest-growing insurance providers.

Mr Wood has enhanced his reputation as one of the industry's most successful executives, having acquired full control of esure from Lloyds Banking Group in 2010 in a deal valuing it at about £265m.

It also owns the Sheila's Wheels brand as well as half of the GoCompare price comparison business.

Esure has appointed four banks to work on its potential flotation, which comes amid a revival of the market for initial public offerings (IPOs).

Crest Nicholson, the housebuilder, went public this week, and a slew of other companies are drawing up similar plans.

Mr Wood had been examining a move offshore in an attempt to preserve his wealth but has reportedly decided against it.

An esure spokesman declined to comment.

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