Gocompare.com Group PLC (LON:GOCO) saw its shares rise on Tuesday after news its chairman Sir Peter Wood has increased his total shareholding in the company to 29.9%, up from 25.6% previously, the maximum amount allowed before launching a takeover offer.
The FTSE All Shares-listed group said the increase came after Wood today acquired 17,783,587 ordinary shares in Gocompare.com at a price of 0.6270p each.
READ: GoCompare.com off-key after results as weflip investment brings cuts to Peel Hunt estimates, target
In a statement, the chairman commented: "My share purchase underlines my view, which is shared by my fellow Board members, that the current Gocompare share price does not fully reflect the operational and strategic momentum in the business. I'm particularly excited about our weflip brand and the potential opportunities it offers.
“If we deliver on our wider Savings as a Service strategy it will be brilliant for savers everywhere, reinforcing my decision to increase my holding to 29.9%."
In mid-morning trading, GoCompare shares were 6.7% higher at 68.90p.
Reporting full-year 2018 results last week, the price comparison website group also announced its intention to invest in the region of £10mln in marketing in weflip, a revolutionary proposition aimed at consumers who overpay for services such as energy.
The group said this will be funded by operational cash flow from the core business and targeted at the potential for exceptional growth in the medium term.
Sit up and take notice
Russ Mould, investment director at AJ Bell commented: “British entrepreneur Peter Wood is a man to watch when it comes to all things insurance. So when he declares that GoCompare is far too cheap and buys another big slug of the business, you know both industry professionals and investors are going to sit up and take notice.”
Wood founded Direct Line, esure and Sheilas’ Wheels and was instrumental in the growth of GoCompare following its acquisition by esure in 2014.
Mould added: “The fact that Wood has taken his stake to the highest possible level before having to make a full takeover offer, under listing rules, would suggest he is extremely bullish about GoCompare’s prospects.
“The next question will be whether he wants to take the business private so it can concentrate on the day job without the distractions of being a public company. One cannot rule it out.”