Intermediary Budget continued its aggressive take-over strategy this week by acquiring south London rival, Foster Insurance Services for an undisclosed sum.

Director Paul Cosh also dismissed as “quite ludicrous” market rumours that Foster staff were being given a six-month ultimatum: to sign a Budget contract of employment, or face being made redundant.

He said: “It is typical when there are mergers that there is a standardisation of contracts but that has to be done with consultation and compensation.

“But so far, staff issues have not been looked at in any way, shape of form.”

Foster is a six-branch personal lines firm that has a turnover of £5m. The company has around 25 staff.

Budget has been aggressively searching for acquisition targets for over a year. In August 1999, the high street intermediary took over Arnott Century, and last month it bought north-west intermediary, Two Cities.

Budget and Foster first entered negotiations on a possible takeover in mid-October. This followed a deal where Budget handled call overflow on Fosters' 0800 telebroking service.