Providence Equity Partners is out of the iSelect bid

Ricki-Lee Coulter at iSelect Fashion + Aid in Melbourne. Scott Barbour/Getty Images

A bid for iSelect, the online comparison site, by Providence Equity Partners has fallen apart.

A short time ago, iSelect shares were down more than 8% to $1.11.

Providence had been doing due diligence for several weeks but the board of iSelect today released a statement saying it had no confidence that a deal would be struck.

The board cited volatility in the health insurance business and management changes as key reasons why there were no reasonable prospects of a price in the best interests of shareholders.

“Accordingly the board has determined that all discussions with Providence and other parties should now cease, and the company focus on operational and capital management initiatives,” said iSelect chairman Chris Knoblanche.

The CEO, Alex Stevens, resigned in October after just 18 months. The commercial director, Scott Wilson, was then appointed as chief executive.

Later that month, the CFO, Paul McCarthy, resigned due to family reasons. He is staying in the business until the end of January.

iSelect will now launch an on-market buy-back over 12 months of up to 10% of the company’s shares.

“An on-market share buyback is an effective method of returning capital to shareholders,” says Knoblanche.

iSelect posted a 31% rise in revenue to $157.2 million in 2015. Net profit was up 54% to $21.4 million. The outlook is for between $26 million and $28 million.

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