Insurer Cox backs £295m buyout offer made by former CEO

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Cox Insurance, the UK's largest motorbike insurer, said yesterday it had entered into a provisional agreement to sell the business to its former chief executive, Neil Utley, who was unexpectedly ousted from the company last summer.

Cox Insurance, the UK's largest motorbike insurer, said yesterday it had entered into a provisional agreement to sell the business to its former chief executive, Neil Utley, who was unexpectedly ousted from the company last summer.

Mr Utley, who is backed by the private equity groups Duke Street Capital and Englefield Capital, has made a preliminary cash offer of 94p a share, including a 2p-a-share special dividend, valuing the company at about £295m. The offer is a 45 per cent premium to the company's closing price on 5 November, before news first emerged of a potential bid.

Cox said the offer was subject to the completion of due diligence by Mr Utley's consortium.

Warburg Pincus and Palamon European Equity, Cox's two largest shareholders which together own one-third of the company's shares, have agreed to accept the consortium's offer once it is formally laid.

Andrew Fisher, who replaced Mr Utley as chief executive last July, has also been rumoured to be considering mounting an offer for the company. However, he would not comment yesterday as to whether a bid would be forthcoming.

In a statement, he said: "The board of Cox has great confidence in the strategy and prospects for the company. The board believes that the value of the potential cash offer sufficiently reflects these proposals to justify proceeding with the consortium's proposal."

Mr Utley added: "If successful the consortium intends to continue the development of Cox as a specialist insurer and retail insurance broker. Retention of Cox's employees will be an integral part of our plan to help the business realise its future potential."

Shares in Cox, which is the UK's sixth-largest motor insurer, had risen more than 10 per cent by lunchtime yesterday, giving the company a market value of £282m. The shares closed up 8.25p at 90p.

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