Towergate was tipped as the most likely buyer this week, following Broker Network's surprise announcement that it had received a bid approach.
Towergate, with £200m remaining in its acquisition war chest, is widely thought to have made the approach.
But AXA has also been tipped as a potential suitor, fuelling speculation in some quarters that a bidding war will begin.
Broker Network could achieve a sale price of over £100m (see box).
Shares in Broker Network Holdings rocketed by 12% last week prompting the company to announce an approach.
In a statement, Broker Network said: “The board of Broker Network Holdings notes the recent rise in the company’s share price and confirms it has received an approach which may or may not lead to an offer being made for the company.”
Senior market sources said that Towergate was looking to acquire a network in order to reinforce its distribution channels.
One senior insurance executive said: “It would provide another means for Towergate to control dist-ribution and move it another notch away from AXA.
“It would show it was running the agenda.”
Chris Hanks, general manager at Allianz Commercial, said: “Given what’s happened with Open International, this could be an interesting move – especially as far as AXA is concerned.”
Another senior industry source went further, adding: “AXA will be petrified.”
Towergate chief executive Andy Homer declined to comment on the speculation but admitted that he would not rule out buying another network.
Stuart Reid, co-chief executive of AXA’s broking division also declined to comment but said: “Networks are a good feeding ground for us all.”
Broker Network chief executive Grant Ellis was unavailable to comment.
Broker Network price watch
Though the Broker NetworkÃ¢â‚¬â„¢s market capitalisation is less than Ã‚Â£70m, Ian Clark, corporate finance partner at Deloitte, predicted it could command a much heftier price. He said: Ã¢â‚¬Å“Factoring in a huge upside, it will fetch somewhere in the region of Ã‚Â£90m-Ã‚Â£100m.Ã¢â‚¬Â
Other sources have suggested figures reaching as high as Ã‚Â£120m.
In the past two months Broker Network shares have soared by over fifty per cent from 335p to as high as 525p. The share price was buoyed by a strong set of results in September, when it posted pre-tax profits of Ã‚Â£6.53m on a turnover of Ã‚Â£23.26m.
The greatest spike, however, has come over the past two weeks as speculation over a possible bid intensified.
As Insurance Times went to press, shares were trading at 512p.
Broker Network has 167 members, responsible for over Ã‚Â£550m in premium, and has made 21 acquisitions.