The insurance arm of the Erinaceous group is trading well and has market-leading margins, says its chairman
Erinaceous Insurance Services (EIS) executive chairman Leslie Goodman has talked up the performance of the business following the announcement by its parent group that it could be sold.
Goodman said: “This is a competitive market, and our competitors will look to gain an advantage and take some of our business – by fair means or foul.
“We have been trading well. Our margins are market-leading. The spread is coherent,” he said.
Last month Erinaceous, the beleaguered property services group, said it was considering offloading EIS following preliminary approaches from various sources, including insurers and private equity.
It is understood that EIS could fetch a price in excess of £100m. The company posted operating profits of £14.4m in 2006, and £4.9m in its latest interims.
Goodman, having described a sale to private equity as “a very real option”, said: “Maybe now is not the right time. If a prospective buyer does not meet our expectations, we won’t sell.”
But sources close to the insurer claimed that a sale was inevitable. One said: “It will be sold. This is about paying back the banks.”
Mark Grice, broker partner at Mazars added: “Insurers would be most able to find synergies with the business. On the other hand, it sounds like a distress sale by the group, so private equity could be keen to pick it up on the cheap. Speed is the essence in this type of deal.”
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