Shares in Esure Group PLC (LON:ESUR) surged on Monday morning after the home and motor insurer told investors it is “minded to recommend" a £1.2bn cash offer from Bain Capital.
The offer hasn’t been formalised just yet, but esure, which is due to report its half-year results tomorrow, said the two parties are in “advanced stages” of negotiations.
READ: Deutsche Bank ups esure to ‘buy’ from ‘hold’, highlighting strong growth and compelling value
Should Bain follow through with its proposal, it would represent a 37% premium to Friday’s closing price of 204p.
“The board of esure has indicated to Bain Capital that it would be minded to recommend a firm offer for esure if made by Bain Capital at the price set out in the proposal,” read a brief stock exchange statement.
Bain has until 5pm on September 4 to either announce a firm intention to make an offer or withdraw from the process altogether.
News of the possible takeover sent esure shares soaring by 30% to 263p. Other insurers also leapt higher, with Direct Line Insurance Group PLC (LON:DLG) (up 2.2% to 329.7p) and Admiral Group PLC (LON:ADM) (up 1.3% to 2,013p) immediately climbing to the top of the FTSE 100.