Broker prepared to sell up to 25% stake to insurer as it seeks more cash.
Oval is in discussions with Allianz to sell a further stake in the business to the insurer.
Allianz already owns a 10% share of the consolidator, which it acquired last November. Insurance Times understands that the talks could lead to Allianz upping its stake to as much as 25%.
The sale of an additional shareholding to Allianz is likely to help the broking group top up its acquisition war chest. Oval is currently planning its funding requirements for future acquisitions.
Allianz is believed to be interested in increasing its shareholding, although a well-informed source said 25% would be at the upper end of the scale.
Philip Hodson, Oval chief executive said in a statement: “We continue to be well funded by our bankers and Caledonia Investments. They are delighted with our performance.
“Oval is currently planning its funding for its 2009-2010 requirements beyond those acquisitions already planned, which is something that any prudent company would be doing.”
Oval could also look to private equity backers and the banks to raise more cash, which could have implications for any deal with Allianz. Caledonia Investments, a private equity group, already owns 35%.
Hodson added: “Our strategy is, and continues to be, that Oval is an independent, privately constituted broker.”
Hodson said that Oval had agreed terms for nine acquisitions which were due to complete within the next six month. The company had ample funds for these deals, he said.
Chris Hanks, Allianz Commercial general manager would not comment specifically on whether Oval wanted to sell an additional stake in the company. “We talk to all the companies in which we have stakes about increasing or reducing our stake. We would therefore be talking to Oval about these things,” he said. Allianz also owns stakes in Jelf Group and CBG Group.
In November Hodson said the group was looking to double its revenues to £140m by the middle of the 2008.
Recent weeks have seen other major broker consolidators announce refinancing deals. Giles Insurance Brokers raised £500m for acquisitions after selling a majority stake to Charterhouse. Jelf also raised money through the sale of a stake to private equity house 3i.
