The French insurer says it won’t sell its UK business off cheaply but will it be able to sell it in one piece?

Since Groupama’s UK business was put on the block last Thursday, there has been rising speculation about where it might end up. RSA was tipped as an early front-runner to launch a bid for the UK insurance arm and its broking businesses Bollington, Carole Nash and Lark. While others including Towergate-backers Advent and ambitious French rival Covea are also thought to be in the hunt.

Groupama UK chief executive François-Xavier Boisseau has already stated that the business won’t be sold cheaply, but one unanswered question that still remains is whether Groupama’s bosses would consider selling off its UK assets in chunks rather than as a whole.

Our story yesterday afternoon detailing how the management team at Lark are understood to be plotting a management buy-out (MBO) could go some way to answering that. Groupama will undoubtedly look at all potential sale options, including the possibility of MBOs at all of its broking businesses. This must remain a serious option. Despite all three being much sought-after businesses, how would their respective management feel about another sale to an insurer at this stage?

Groupama’s advisers Deutsche Bank will be assessing whether the French insurer will gain more value by offloading the UK arm in its entirety or by splitting it up. It could face a challenge in finding a buyer diverse enough to take on all of its business, which includes niches in high net worth, motorbike and commercial insurance.

There is also likely to be hunters in the market looking to snap up individual assets rather than entire businesses. Groupama is expected to raise up to £300m from the sale of its UK businesses but the uncertainty over how it will be sold is casting a shadow over the price at the moment.