Exclusive-Bain Capital taps advisers for sale of UK's esure, sources say

By Amy-Jo Crowley and Carolyn Cohn

LONDON (Reuters) - Private equity firm Bain Capital has lined up advisers for the possible sale of British motor and home insurer esure, three people familiar with the matter told Reuters.

Fenchurch is among the advisers tapped for the sale, two of the people said.

Potential bidders include Belgian insurer Ageas, which has said it wants to expand in UK general insurance but abandoned its pursuit of esure's larger rival Direct Line earlier this year, one of the people and third one said, speaking on condition of anonymity.

Esure could be worth at least 1 billion pounds ($1.31 billion) based on a improving profit outlook at the company, one of the people said.

Bain declined to comment. Ageas said it never comments on market rumours. Fenchurch did not respond to a request for comment. Esure referred requests for comment to Bain.

Esure and Ageas use the same technology platform, EIS, which makes the target particularly attractive to Ageas, the person said. Esure's smaller size, compared with the 2.4 billion pound Direct Line, also makes it a manageable proposition for Ageas, the person added.

The sale talks come as motor and home insurers' performance have suffered in recent years from the rising cost of repairs in an era of high inflation.

However, esure reported a 17% increase in turnover in the first half of 2024, and said it had completed modernising its technology, according to results posted on its website. Esure made a trading loss of 16.7 million pounds in 2023.

Esure, whose products include careful driver brand Sheilas' Wheels, was formed in 2000 by former Direct Line founder Peter Wood. Bain took esure private in a 1.21 billion pound deal in 2018.

($1 = 0.7621 pounds)

(Reporting by Amy-Jo Crowley and Carolyn Cohn. Editing by Anousha Sakoui and Louise Heavens)