Shares in iSelect have shot up as the insurance comparison business announces a new boss and ponders a takeover proposal.
On Tuesday, iSelect announced it had received a non-binding, conditional takeover proposal from an international private equity firm.
"We are reasonably satisfied that the indicative bid is worth pursuing. If we didn't think there was value for the company, we would not have explored this further," chairman Chris Knoblanche told analysts.
The company declined to reveal details about the bidder's identity or the offer value.
However, an Australian Financial Review report said US private equity firm Provident Equity Partners had made the offer, at below $2 a share.
Investors cheered the news, sending iSelect's shares up by 13 cents, or 8.5 per cent, to $1.66.
iSelect said it has appointed Goldman Sachs and Morgan Stanley as financial advisors.
The private equity bidder has been in discussion with the company for a while and it was time to allow the bidder more access to information and to its senior management, Mr Knoblanche said.
iSelect's board expects to fully explore the potential bid and take a decision in the next three to four weeks, he added.
The online business, which earns commissions from insurers when customers switch health funds using its comparison website, listed in 2013.
It is the market leader in the health insurance segment, and has also diversified into broadband, home loans and energy, but has faced several challenges recently.
It was subject to a scrutiny from the Australian Securities and Investments Commission, was forced to issue a profit downgrade last year, and has seen significant turnover in senior management.
On Tuesday, the company said chief executive Alex Stevens, who had joined the company in 2014, has resigned effective immediately to pursue other opportunities and will be replaced by commercial director Scott Wilson.
Meanwhile, the company said if the takeover bid does not proceed, it will implement a planned share buyback.
"We have been considering capital management, and that process will be continued once we have certainty about the bid," Mr Knoblanche said.
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