M&G, the FTSE 100 financial and insurance services group, is garnering interest from Australian investment bank Macquarie Group, which is reportedly exploring a £5bn takeover.
Macquarie is yet to make an approach, although a typical takeover premium of 30% suggests the group would need to spend £6.5bn to buy out M&G, according to Sky News, which broke the story.
Should Macquarie complete the takeover, it is unlikely that it would seek to hold onto M&G’s insurance arm, either partnering with an acquirer of that business or selling it once the purchase has been completed.
Sky News suggested that insiders have named Phoenix Group, the London-listed insurance business, as a prospective buyer of its insurance business.
One of Britain’s largest inward investors for many years, with £350bn in assets, M&G’s takeover would spark further debate on the health of UK companies which are being cherry-picked by foreign and private equity.
Rumours of a takeover have failed to trigger a rally in M&G’s share price, however, suggesting that “the market is sceptical about a deal emerging, or that a bid premium won’t be generous”, observed Russ Mould, investment director at AJ Bell.
M&G’s shares were little moved in midday deals, changing hands at 218p.