Esure decision to offload Gocompare hailed as 'strategic sense'
Motor insurer esure has confirmed plans to spin off its Gocompare price comparison site and line it up for a stock market listing worth around £400 million.
Esure, which owns brands including Sheilas' Wheels, said the demerger would help both businesses reach their "full potential".
It comes after reports over the weekend revealed plans for the Gocompare spin off.
The move comes after esure last year bought the remaining 50% of Gocompare it did not already own from its founders for £95 million.
Esure said earlier this year it would look at a demerger of Gocompare as part of a review and recently hired former lastminute.com boss Matthew Crummack as the division's chief executive.
Gocompare - whose TV adverts feature the moustached opera singer Gio Compario - is expected to be worth as much as £400 million when it floats on the stock market after the demerger.
Esure said the spin-off was set to take place in the fourth quarter of the year.
Sir Peter Wood, chairman of esure Group who will also chair Gocompare.com, said: " Following the strategic review and the appointment of Matthew Crummack as chief executive of Gocompare.com, we believe that a demerger of Gocompare.com from esure will allow both entities to thrive and reach their full potential."
He added: "A demerger will allow the separate management teams to focus on their independent strategies."
The listing, which will cost £19 million, will give Gocompare a £75 million debt facility and unlock a £63 million dividend for esure.
Newport-based Gocompare has been investing heavily in new data features and an advertising push, which saw pre-tax profits drop 9% to £23.3 million last year.
Esure first bought a 50% stake in Gocompare in 2007 - overseen by Sir Peter.
Gocompare attracts around five million visits to its site every month and allows consumers to compare more than 40 products across the insurance market.
It was founded in November 2006 by Hayley Parsons, who had previously worked for the insurer Admiral for 14 years.
Eamonn Flanagan, analyst at Shore Capital, said the demerger makes "strategic sense".
Shares in esure rose 2% after the demerger announcement.