Shares in reinsurance broker Benfield Group Ltd rose more than 12 percent to 305p in early trading this morning (28 September) following reports of aborted takeover talks with the private equity arm of Goldman Sachs.
According to a report in The Daily Telegraph, Goldman Sachs had approached Benfield valuing the firm at around £700mn. Although talks arre thought to have broken down 10 days ago because the investment bank was struggling to raise debt financing in the current market, the latest move has fuelled speculation that the broker may be a target for takeover talks or go private .
Rival brokers Marsh, Willis and Aon have all shown an interest in a deal with Benfield in the past.
However, analyst Nick Johnson of Numis Securities pointed out: “Although it is clear that Benfield is a potential bid candidate, the fact that the three most likely buyers have so far failed to agree a deal doesn’t inspire confidence in the probability of a fully fledged offer.”
Numis – who has turned bearish on the stock - has a target price of 245p.
Benfield’s shares rose 35p from 270p in early trading on the London Stock Exchange before falling back to 291p at the time of going to press. At 270p, the company is valued at £690mn.
At the beginning of the year, GS Capital Partners – the private equity arm of the investment bank - bought the US broker USI Holdings for $1bn.