Advent is the clear favourite in deal to reduce Cullum's shareholding to less than 50%

Towergate remained locked in talks with private equity firm Advent International over a deal reported to be worth around £200m, as Insurance Times went to press.

Chairman Peter Cullum and chief executive Andy Homer were thrashing out the details of the deal with Advent, which could reduce Cullum’s shareholding from 65% to less than 50%.

As reported previously, Towergate was in talks with at least one other private equity firm. But Advent has emerged as the clear favourite to tie up a deal with Towergate.

The equity backing is likely to involve contingencies built into the eventual amount paid. It is designed to improve the terms of Towergate’s planned £665m bond issue, which will replace the company’s current outstanding debt, reduce the number of outstanding preference shares and give the broker a £100m acquisition fund. It is expected that the private equity financing will trigger the bond issue.

Towergate and Advent declined to comment.