Cox Insurance, the UK's biggest motorbike insurer, has entered into a provisional agreement to sell the business to its former chief executive Neil Utley and his consortium of Duke Street Capital and Englefield Capital.
The consortium, led by Utley, who surprisingly left his position with the company abruptly only last summer, has made a preliminary cash offer of 94p a share, including a 2p-a-share special dividend, valuing the company at about GBP295 million. The Utley consortium bid represents a 45% premium to the company’s pre-bid share price.
The chances of Utley getting his hands back on the two wheel automotive insurer appears to be strong as Warburg Pincus and Palamon European Equity, Cox’s two largest shareholders, have agreed to accept the consortium’s offer once it is formally laid.
Meanwhile, Andrew Fisher, who took over from Utley as chief executive, is believed to be considering making an offer of his own for the company. However, Fisher has refrained from revealing his intentions.
Peter Owen and Andrew Fisher, chairman and chief executive, respectively, of Cox, issued a statement saying: The board of Cox has great confidence in the strategy and prospects for the company. The board believes that the value of the potential cash offer sufficiently reflects these prospects to justify proceeding with the consortium’s proposal in the interests of Cox shareholders.
Neil Utley commented: If successful the consortium intends to continue the development of Cox as a specialist insurer and retail insurance broker. Retention of Cox’s employees will be an integral part of our plan to help the business realise its future potential and we believe that our success would present them with significant opportunities going forward.