RBC says Bain's offer the best eSure can expect, for now

13th Aug 2018 15:14

(Sharecast News) - Following an unsolicited bid from Bain Capital, analysts at RBC Capital Markets saw fit to take another look at their numbers on online insurer eSure.The insurer received a proposal from Bain that would see the alternative investment firm acquire 100% of eSure at 280p per share - a premium of 37% to the group's closing price on 10 August.While RBC said the proposal was just ahead of its own 275p target price, the Canadian broker pointed out that the offer still represented an undemanding multiple and "probably" the best that eSure can expect "for now".Despite eSure shares trading as high as 288p just a year ago, RBC felt that with the mood around UK motor insurance stocks becoming "far more negative in recent months", the firm's board was likely to recommend the offer at its 280p price at its next general meeting."We expect that other private equity firms plus a number of trade players will have considered making an offer, but we do not expect a counteroffer to emerge," RBC said.To us, there is limited read-across to the other UK motor insurers as this situation involves a motivated seller, a circumstance which we do not see at the other UK motor insurers," concluded RBC's analysts.RBC left its 'outperform' rating on eSure unchanged.