Two rival bids are being hatched to acquire Cox Insurance for over £300m. It is understood ex-chief executive Neil Utley is seeking cash from investors while motor insurer Hastings Direct could also bid.
A market source said: "Neil is actively approaching old contacts and a number of venture capitalists to raise cash to bid for Cox. The share price at the moment is rock bottom so this is his best chance."
Cox's market capitalisation, according to ABN-Amro, is £187.8m, though the source said any prospective bidders would have to factor in Cox's debts and pay £300m or above. He said this included "£100m in short term debt and up to £100m to meet solvency requirements" once the Lloyd's ring-fencing deal came to an end next year. Neither Utley nor Hastings Direct were available for comment.
Meanwhile, Cox has placed a memorandum out to software houses to start a tender process for Brokersure, the online insurer quotation system for its brokers, according to sources. No price has been specified but investment house Numis said that premium transacted through the system had grown from an "annualised amount of £3m in the first quarter of 2003 to £18m in the fourth quarter of 2003".
ABN-Amro was bullish about Cox's future. In a brokers note it said: "We maintain our belief that the underwriting profits will not fall as sharply as predicted and that the broking and insurance services division [of Cox] will remain steady, despite the Crowe run-off contract not being replaced."
Cox chief executive Andrew Fisher said: "It doesn't surprise me that Neil is looking to buy back into the operation. He is an entrepreneurial individual and I'm sure feels there is unfinished business."
Cox declined to comment on rumours Brokersure was up for sale.
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