Esure to make market debut in £1.2bn IPO

THE OWNER of the Sheilas’ Wheels insurance business will make its market debut this morning in an IPO set to value the company at around £1.2bn.

Esure shares yesterday priced at the top end of their 240p to 310p range, with investors told to bid at least 290p if they don’t want to miss out.

Earlier this month strong demand saw the company, which also owns half of price comparison website Go Compare, fill its order book on the first day of its investor roadshow. The flotation will be London’s biggest IPO of the year and puts Esure on track for inclusion in the FTSE 250.

Chairman and founder Peter Wood will see his stake valued at around £570m, leaving him on track to receive £140m in cash when he sells down his 49 per cent holding to a third in the IPO.

Wood has already enjoyed one big insurance payday after he revolutionised the industry by setting up Direct Line in the 1980s.

One group which will be unhappy with today’s float is Lloyds Banking Group. It sold its 70 per cent stake in Esure back to Wood and private equity outfit Penta Capital for £185m in 2010. Those shares would now be worth more than £800m.