The motor insurance group esure is this week set to unveil plans for a £500m demerger of its price comparison unit, Go Compare. Sky News understands that esure's board is expected to sign off on the move, which was signalled in June, in the next ‎few days. The demerger - under which a company is separated from its parent, with the shares handed to existing investors - will see esure's founder, Sir Peter Wood, being named chairman of the price comparison operation, according to insiders. The separately listed Go Compare is also expected to name a number of new independent board members‎ before the demerger takes place. Esure's announcement will come just weeks after it cut its first-half dividend by nearly a third, with the reduced payout paving the way for greater capital investment in its core business. Go Compare has thrived amid booming demand for price comparison sites' services, with competitors such as Comparethemarket and Confused.com ploughing tens of millions of pounds into high-profile marketing campaigns. Esure's announcement in June that it would look at a demerger of Go Compare prompted a number of private equity firms to examine takeover bids for the whole group, although it said later that month that it had not received an approach. Deutsche Bank (LSE: 0H7D.L - news) is handling the demerger of Go Compare, whose opera-singing character in its advertising campaigns has become an emblem of the race to build market share in a fast-growing industry.‎Esure went public in 2013, with its shares priced at 290p, and paid £95m to acquire 50% of Go Compare in 2015.On Friday, the shares closed at 286p, giving the company a market value of £1.19bn.Sir Peter, esure's founder and one of the insurance industry's most successful entrepreneurs, is said by friends to have been willing to consider offers for the whole company.He owns just under 31% of esure, a stake worth more than £300m. Sir Peter said in June: "Now (NYSE: DNOW - news) is the right time to review strategic opportunities for the Gocompare.com business, including a potential demerger, in order to continue to maximise value for our shareholders." Announcing half-year results last month, esure said Go Compare's revenue rose by more than 22% to £72.9m, with operating profit up 9% to £14.5m. An esure spokesman declined to comment this weekend.
Motor insurance company Go Compare expected to unveil a £500m ($661m) demerger of Esure, its price comparison subsidiary, according to Sky News. The demerger, handled by Deutsche Bank, will separate Esure from Go Compare and deliver its shares to existing investors. Inside sources suggest that founder and 31% stakeholder of Go Compare, Sir Peter Wood, is to serve as chairman of Esure. Go Compare paid £95m in 2015 for a 50% stake in Esure, which saw revenues rise 22% to £72.9m in H1 2016 with an operating profit of £14.5m.