PETER WOOD, the pioneer behind some of Britain's best-known insurance brands, is attempting to buy out his Esure motor insurance business from Lloyds Banking Group.
Wood has lined up financing from the buyout firm Penta Capital and hedge fund Toscafund, both chaired by Sir George Mathewson, former chairman of Royal Bank of Scotland.
Mathewson, who knows Wood from their time together at RBS, is not believed to be involved personally in the deal but has helped to arrange the financing.
Esure, famed for its "calm down dear" advertisements starring Sunday Times columnist Michael Winner, is estimated to be valued at between £200m and £250m under the terms of the deal.
Wood chairs the business, which he set up as a joint venture with HBOS in 2001. Lloyds inherited a 70% stake when it took control of HBOS this year. Although Wood owns only 24% of the shares, legal clauses mean he has control of the business in effect. The management owns the other 6%.
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Wood has complained about the behaviour of Lloyds since it acquired its stake, saying its press releases have given the impression that Esure is a wholly owned subsidiary of the bank, not a joint venture. A clause in the original agreement allowed Wood to push for a flotation or the right to buy out HBOS at the end of last year, which was the peak of the credit crunch. The easing of financing conditions has allowed him to re-examine the deal.
The Esure empire includes Sheila's Wheels, which Wood created in 2005 for women drivers. He is best known for founding Direct Line in 1985. It was the first British company to make a success of selling insurance products directly to customers over the phone.
Direct Line, owned by Royal Bank of Scotland, is for sale with a price tag of £5 billion to £6 billion.
Wood also owns 10.5% of Hornby, making him the largest private shareholder in the maker of toy trains and Scalextric cars.