Alexander Forbes is rumoured to be selling off part of its business, after it was revealed it is in
"advanced negotiations "to sign a deal with a broker.
JLT, Marsh and Folgate Partnership have been identified as potential bidders. One broker claimed:
"Alexander Forbes 'PI activities would fit into their plans. It could be trying to release cash in a bid to expand into other areas."
Speculation over the broker 's plans was sparked after it issued a statement on the Johannesburg stock exchange on 12 March, advising investors to exercise caution with its shares.
A securities analyst said: "If a company is about to sell-off a significant part -which is usually at least 15% - of its business it issues a warning. They are effectively urging shareholders not to sell."
Following a drop in its share price to SAR900 (72.1p),rumours have persisted that Alexander Forbes needs to raise capital and is looking to sell-off its professional indemnity (PI)book.
Alexander Forbes denied the PI sell-off rumour. Chief operating officer (Europe) Rael Gordon said:
"We are in the advanced stages of negotiations so we cannot comment."