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Admiral Pulls the Plug on Confused Sale

Jul 12, 2007

By Vincenzo Pelosi

CAR insurer Admiral has scrapped plans to sell a 25pc stake in its price comparison website after prospective private equity buyers demanded too much say in the running of the company.

Admiral chief executive and cofounder Henry Engelhardt is understood to have baulked at investor demands for seats on the board and plans to saddle the company with a debt burden.

The firm said it received indicative offers that valued the entire business at up to 650m - below the 700m sought by advisers Merrill Lynch.

The insurer has been considering offers for a stake in the group since May, eager to cash in on surging investor appetite for internet price comparison sites before competition in the market hots up.

But it said potential buyers set out conditions that were 'significantly more onerous than the board had anticipated' and would 'restrict the ability to maximise Confused's potential as part of the Admiral Group in the medium to long term'.

Admiral declined to reveal the identities of the potential buyers involved.

US businessman Barry Diller, whose company InterActive Corporation owns ticketmaster and, was one of a number of investors thought to be keen on buying the company.

The collapse of the talks is a blow to Admiral, down 28p to 862p, which was hoping to use cash from any sale to reinvest in Confused.

Competition in the price comparison website market is getting fierce, with both Tesco and Royal Bank of Scotland tipped to launch their own services soon. started out as a car insurance comparison site in 2003 but has since moved into home insurance, loans and credit cards. It had 1.3m customers last year and is expected to turn a profit of 30m this year.

The scrapping of the sale has come weeks before rival price comparison website is set to float on the stock exchange in an IPO which is expected to value the company at 1bn.

Analysts expect a flurry of merger and acquisition activity in the internet price comparison market over the coming months, with well known brands such as Kelkoo seen as potential bid targets.

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