Esure Tycoon May Quit Britain Amid Tax Debate
The insurance tycoon behind Direct Line and Esure is plotting to quit Britain in a move that could potentially slash a multimillion pound tax bill triggered by the sale of his business empire.
I can reveal that Peter Wood, who set up Esure in 2000, is examining a possible relocation to Jersey in the coming months, according to people close to him.
Mr Wood - whose wealth was estimated at £500m by this year's Sunday Times Rich List - has not yet taken a final decision to move offshore. His deliberations come as he considers a sale or flotation of Esure, with the latter option considered more likely by City analysts.
A source close to Mr Wood said he had identified a property in Jersey and was "very interested" in a move, but stressed that it was only "one of a number of options" that he was considering and it was unclear when his relocation might take place.
Known for its television adverts starring Michael Winner, Esure has become one of Britain's biggest insurance brands during the last decade. Estimates of its value vary, but some City analysts believe it is likely to be worth well over £1bn, meaning Mr Wood's shareholding would be worth hundreds of millions of pounds.
A relocation offshore could save Mr Wood tens of millions of pounds in tax depending upon how any transaction relating to Esure was structured. It is estimated that he has paid approximately £50m in personal taxes since setting up Direct Line.
Mr Wood's potential move may add fuel to the debate about the taxation of Britain's super-rich, with the top rate of income tax set to fall from 50p to 45p after the end of this tax year. Among other prominent members of Britain's business community to leave Britain in recent years were Guy Hands, the private equity veteran behind Terra Firma Capital Partners, and Alan Howard, the hedge fund tycoon.
The source close to Mr Wood confirmed that he had always been a UK taxpayer but said that he was "very much an international businessman who has sat on the boards of companies in different countries". He already owns two homes in the US where he spends a significant amount of time, according to this person.
"Peter has created thousands of jobs and generated hundreds of millions of pounds for the UK. His companies have always been based in the UK and paid UK tax," a friend of the tycoon's said. "It is natural that he is examining ways to preserve some of the personal wealth he has created."
Mr Wood hired bankers from Deutsche Bank and JP Morgan last year to prepare a flotation of Esure, which is expected to be ready by the end of the year. A decision about whether to proceed with a listing is likely to be made early next year.
While a stock market listing is considered to be Mr Wood's preference, City sources say that a takeover or the sale of part or all of the company are also under consideration. One potential buyer would be Travelers Companies Inc, the US insurer.
Mr Wood and Jay Fishman, the chairman and chief executive of Travelers, know each other well from the British entrepreneur's successful US ventures.
Direct Line, which was founded by Mr Wood during the 1980s, is regarded as having pioneered a revolution in Britain's insurance industry, with its emphasis on slick administration, claims settlement and customer service.
Last week, Direct Line listed on the London Stock Exchange with a valuation of more than £2.5bn, netting substantial proceeds for Royal Bank of Scotland, its' taxpayer-backed owner.
Esure also owns 49 per cent of Go Compare, the price comparison website, which yielded a near-£7m dividend for Esure last year following a surge in profits.
Esure declined to comment.