Insurance firm bid could net £2bn for chairman

The founder of the UK’s largest private insurance firm could net £2bn (€2.9bn) after it was reported today that his company had received bid approaches.

Towergate executive chairman Peter Cullum is believed to have a price tag of at least £3bn (€4.4bn) on the business, in which he has a 65% stake.

Mr Cullum, who is 56, established Towergate in 1997 to provide insurance in niche markets ranging from holiday homes to classic cars. It now employs 3,500 staff in 100 UK offices after expanding through more than 100 acquisitions.

Towergate has reportedly appointed advisory firm Lexicon to handle potential offers, which are thought to have come from a number of private equity firms, including Candover, Blackstone, TA Associates and Charterhouse.

A spokesman said in the Guardian newspaper today that no decision had been made to sell the business, with all approaches being directed to Lexicon.

If Mr Cullum does agree to sell, he is likely to give some of the proceeds to charity. He owns a charitable trust that funds children’s charities and reportedly paid half of his £9.2m (€13.5m) bonus into it last year.

He was the 2005 winner of the Ernst & Young UK entrepreneur of the year award and is the current holder of the M&A deal maker of the year.

The Maidstone-based company was valued at £1bn (€1.47bn) following a refinancing last year, but directors believe the value of the business has soared since then. One of the private equity groups is already thought to have offered close to £3bn (€4.4bn).

Last month, Towergate bolstered its standing by appointing Patrick Snowball, former head of UK operations at Norwich Union owner Aviva, as its deputy chairman. And it carried out some of its biggest acquisitions to date last year, including the purchase of Paymentshield, which provides mortgage-related general insurance to intermediaries.