Markerstudy's 9.3% Brightside stake is defensive play - Humphreys

Markerstudy bought its 9.3% stake in Brightside to protect its interests in case the broker was taken over, according to underwriting director Gary Humphreys.

Markerstudy became a major capacity provider to Brightside last October when it signed a deal to support an underwriting facility for the broker’s eCar online motor insurance offering.

When Arron Banks resigned as Brightside chief executive last year, he unveiled plans to buy Brightside with private equity money. Banks also is a director of Markerstudy’s Gibraltar-based rival Southern Rock, which also provides capacity to Brightside.

Humphreys said: “We were concerned that other people may seek to buy [Brightside] back or take an interest so we thought it was time we took a strategic stake to protect our interest going forward.

“There was a situation with the previous owner, who suggested he may take [Brightside] back and obviously he had competing capacity within the organisation previously so we just felt it gave us a stronger relationship with Brightside.”

Humphreys added: “We believe in the Brightside business model.”

In an interesting twist, the Markerstudy stake buy means Banks no longer owns a notifiable stake in Brightside. Markerstudy’s 9.3% holding comprises 42.6 million shares, 27.5 million of which it bought from Banks.

The insurer bought the remainder from Brightside co-founder and commercial director John Gannon.

Banks has been gradually reducing his stake in Brightside. The company announced on 1 February that Banks’s shareholding in the firm had dropped to 7.43% from the 15.2% stake he held back in July 2011.