Britain's esure eyes ?1.1 billion valuation in market debut

LONDON (Reuters) - British home and motor insurer esure expects to be valued at around 1.1 billion pounds when it makes its London stock market debut this month, it said on Friday.

That values founder and chairman Peter Wood's stake at more than half a billion pounds and means he could bank around 170 million pounds from selling a third of his holding.

Esure, which insures about 5 percent of Britain's motorists, set a price range of 240 pence to 310 pence per share for the offering, in which it plans to float up to half of its shares.

After years of subdued listing activity due to the financial crisis, London has seen a resurgence in companies seeking to sell shares on its markets this year.

British estate agent Countrywide and cable products maker HellermannTyton are also in the process of listing.

Announcing its flotation plans last week, esure, which owns the female-focused Sheilas' Wheels brand, reported 2012 pretax profit more than doubled to 115 million pounds.

"Our 2012 results were excellent and investors will clearly look at that and make their own decisions," Chief Executive Stuart Vann told Reuters on Friday, as investor roadshows kicked off in London.

"We will be seeing (investors in) a lot of different markets over the next two weeks so it is a very exciting time for us, very busy but very exciting."

On a 2013 forward price-to-earnings basis, Esure's valuation is roughly in line with fellow British motor insurer Direct Line , which is deemed to have lower growth prospects, and at a discount to Admiral Group , two people familiar with the matter said.

Direct Line and Admiral Group trade at 10.25 and 14.02 times 12-month forward earnings respectively, according to Thomson Reuters StarMine.

WIPING OUT DEBT

Esure, which plans to raise 50 million pounds from the sale of new shares to wipe out its debt, said the bulk of the offering would be made up of existing shares sold by Wood, Tosca Penta Investments as well as company management and employees.

How much they sell will depend on where the offer prices, but the total stake floated will be between 35 and 50 percent of the company, prior to an overallotment option which could see the offer size increased by 15 percent if demand is strong.

Last week Wood, esure's biggest investor with a stake of about 50 percent, said he would sell at most a third of that.

At the mid-point of the price range the company said it expected to be valued at 1.1 billion pounds, with the selling shareholders receiving around 438 million pounds.

Wood will remain esure's largest shareholder following the listing, which is expected to be completed on March 22.

The entrepreneur, who in 1985 pioneered telephone-based insurance sales in Britain with the launch of Direct Line, founded esure 13 years ago as a joint venture with mortgage lender Halifax, which was acquired by Lloyds in 2008.

In 2010, he led a consortium that paid 200 million pounds for a 70 percent stake in esure held by Lloyds.

Direct Line, majority owned by Royal Bank of Scotland , floated in October last year and has seen its shares rise around 20 percent since.

Deutsche Bank and J.P. Morgan are joint global co-ordinators and joint bookrunners on esure's sale, while Canaccord Genuity and Numis Securities are co-lead managers.

(Additional reporting by Brenda Goh, Editing by Sinead Cruise and Paul Casciato)

Source: http://news.yahoo.com/britains-esure-eyes-1-1-billion-valuation-market-143301414--finance.html

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