Cullum linked to Utley’s bid for Hastings and Advantage

Peter Cullum could offer financial backing to a management buy-out (MBO) of Hastings and Advantage.

Cullum, the executive chairman of Towergate, has been linked with Neil Utley, chief executive of IAG UK, who is thought to be orchestrating a buy-out of Hastings, Advantage and possibly Equity Insurance Brokers.

It is understood there are several options and that Cullum is one of a number of potential backers, including private equity groups. Cullum was 40th in this year’s Sunday Times Rich List, with an estimated personal fortune of £1.7bn.

One possible outcome is that Utley would help arrange an MBO of Hastings and Advantage, led by Ed Fitzmaurice, chief executive of Hastings, and Keith Charlton, chief executive of Advantage, with backing from Cullum and the support of IAG. Utley would remain chief executive of IAG UK and take on a non-executive role as chairman of Hastings and Advantage. Equity Insurance Brokers would be sold to a third party – probably Swinton, which is thought to be in advanced sales talks. But an MBO of Hastings, Advantage and Equity is also understood to be on the table.

IAG has publicly said it wants to sell Hastings, Advantage and Equity Insurance Brokers, together or separately. It has not included Equity Red Star, the Lloyd’s insurer that makes up 90% of the UK company’s profits, in the deal.

Insurance Times understands this is still the case, contrary to recent reports that QBE was looking to buy the business.

Utley refused to comment on the reports about QBE and Equity Red Star, but pointed to a statement made by Michael Wilkins, global chief executive of IAG, in November. Wilkins said the business could be disposed of in one transaction or several, and that Equity Red Star was not for sale.

Utley said: “We were very clear at the annual general meeting that we were looking to divest Hastings, Advantage and Equity Insurance Brokers. That is now under way.

“We undertook to come back [with details] in February 2009, and that is still our intention. We also said Equity Red Star is not part of that process.”

Utley refused to comment further. Swinton declined to comment.