Esure Group PLC (LON:ESUR) has agreed to be taken over by private equity firm Bain Capital in a deal that values the insurer at £1.2bn.
In a statement on Tuesday, a day after confirming that it had received a bid from Bain, esure said it would accept the cash offer of 208p per share.
READ: Insurers motor higher as esure “minded to recommend” £1.2bn cash offer from Bain Capital
The deal represents a premium of 37% to the closing price on August 10, the last business day prior to the offer period.
Esure said it believes the proposed takeover will deliver strategic benefits to the business, including further investment by Bain.
“As a private company and with Bain Capital's backing, esure will be able to invest behind the innovation required to fully realise the opportunities in this market,” said esure chairman Peter Wood.
“I am pleased to be continuing as chairman and am fully aligned with Bain Capital, who I believe will be a tremendous partner in the next phase of esure's journey."
The deal is subject to regulatory and shareholder approval.
First half profits dented by adverse weather
Esure separately published its interim results on Tuesday, which showed pre-tax profit fell to £36.1mln in the first six months of the year from £45.2mln a year ago.
The company said profits were dented by a £14mln charge from adverse weather-related claims costs in the home and motor accounts.
The adverse weather included the so-called 'Beast from the East', which brought icy temperatures and heavy snowfall from Siberia to parts of the country in February and March and flash flooding in May.
Gross premiums increased 12% to £440.3mln from £393.3mln last year, driven by growth in motor insurance.
Disappointing results make offer price more attractive, says ShoreCap
Shore Capital said the results were below expectations on all metrics.
"Overall the results are disappointing but that is of little consequence to the shares at the moment given the offer on the table," the broker said.
"With around 5% upside to the offer price remaining after yesterday’s announcement, we would expect the gap to close as the likelihood of a successful purchase increases. If anything, the results miss makes the 280p offer price more attractive, in our view."
Shares rose 3.7% to 277p in morning trading.