A consortium led by insurance entrepreneur Peter Wood has failed in its initial attempts to take UK insurance group Cox International private after the company has rejected a preliminary offer for the business.
Weekend reports said that Woods, chief executive of Esure and founder of Direct Line, was backing Neil Utley, chief executive of Cox’s retail insurance arm, in a 85p to 100p a share bid to take the company private in a management buyout proposal valuing the business £250m. The bid was thought to be financed by high street bank, HBOS. It is being advised by corporate finance specialist Lexicon Partners.
Today Cox confirmed in a statement to the London Stock Exchange that it had received an offer, but said that “there was insufficient substance and value to the proposal to justify continuing talks.” The company said that it is not in talks with any other party.
Warburg Pincus and Palamon are Cox’s two largest shareholders, between them holding around 40 per cent of the company. Warburg Pincus became the largest shareholder of Cox through a subscription of new ordinary shares in April 1996. Palamon has an 11 per cent stake, which it bought in June 2000. Esure, the joint venture set up last year between Wood and UK bank HBOS, has built a 1.3 per cent stake in the firm.
Shares in the Lloyd’s of London insurer rose 26% on the news of the rejection. They closed today at 79.5p, up 29.6%.