Home, car, pet and travel insurer Esure (ESUR) is looking into demerging price comparison website Gocompare.com. There are suggestions the proceeds could be returned to shareholders.
The group moved 2% higher to 288.7p after the board launched a strategic review of the business, famed for its TV adverts featuring a tenor singing ‘Go compare’.
If the review recommends a demerger the standalone business could qualify for the FTSE 250. Esure valued the company at £190 million in April 2015 and the threshold for the mid-cap index is around £235 million.
Chief executive Stuart Vann's comments that the board is committed to delivering attractive returns to shareholders could be a hint the proceeds from any sale will be returned to investors.
A new marketing strategy, offering a wider range of products, as well as a wide-ranging cost-cutting exercise has led the board to forecast a 30% increase in Gocompare.com’s profits in 2016.
Nonetheless, this looks a good time for Esure to earn top dollar from selling the asset so it can focus on its core business of insuring homes, car, cats and dogs, while avoiding the marketing war in the price comparison space.
Former lastminute.com boss Matthew Crummack has been appointed chief executive of the site.
