A consortium led by Goldman Sachs Private Equity was interested in Chaucer
Goldman Sachs Private Equity and TPG, a US private equity firm, expressed an interest in Chaucer, according to Financial Times.
The interest fizzled out at the end of last year, although a number of private equity firms remain interested in buying up companies in the insurance sector.
A combination of the successful Apollo and CVC bid for Brit, along with poorly valued companies, is attracting bidders, the FT says.
Private equity tycoon Guy Hands is currently interested in buying Chaucer, although no formal offer has been made. Canopius has also been linked with the Chaucer.
Shore Capital analyst Eamonn Flanagan said bidders might have to pay up to 75p per share to take over the Lloyd’s insurer. The current share price stands at 61.25p.
Flanagan said: “This comes as no surprise to us given the scale of Chaucer, its capital efficiency, its asset gearing and its valuation. Our net tangible asset value forecasts for 2010 and 2011 are 55p and 58p respectively. An exit rating of between 1.25x and 1.3x out 2011F net tangible asset value would be highly justified for this well managed business, implying an exit price of between 72.5p and 75p.”