Claims Direct founders to sell out

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The Independent Online

Claims Direct, the beleaguered no-win, no-fee personal injury company, is on the brink of brokering an agreement for an unnamed investor to take a larger stake in the company.

The company was locked in talks last night and would not comment on the identity of the investor. It is understood that an initial agreement is likely to be reached and will be announced to the Stock Exchange today.

The move would put the company in its strongest position to date in fighting off a hostile offer for the company from its two founders, Tony Sullman and Colin Poole. This is because the investor would buy some of the 43 per cent stake Mr Sullman and Mr Poole control in Claims Direct. The two, formerly the company's chairman and chief executive, have also been asked to step down from their current roles as non-executives.

Mr Sullman is not taking part in the discussions with Claims Direct personally as he is in Las Vegas, where he spends much of his time. Mr Poole could not be contacted.

Mr Sullman and Mr Poole attracted widespread criticism from Claims Direct's independent directors and many employees when they unveiled their offer for the company, valuing it at £19m, or 10p a share. The company floated last July at 180p, netting £50m for Mr Sullman, and £10m for Mr Poole who sold part of his solicitor's firm to Claims Direct.

The independent directors claim they are capable of turning Claims Direct's loss-making business around, but only if they expel Mr Sullman and Mr Poole from the company.