Does Phillip Hodson really have a five-year plan?
Well, that was a turn up for the books. No sooner had Phillip Hodson set out his stall for Oval’s big 2012 floatation than plan two arrives on the table. Just what could have changed his mind? For sure, it wouldn’t have been Oval’s rebel shareholders – who are sitting on around £20m in equity and are pressing for floatation at the earliest possible opportunity.
Hodson has ruled out a sale, stating Oval are now “buyers not sellers.” Instead, his latest plan now centres on doubling the size of his broking empire by making a transformational acquisition. Investment banking advisors Rothschild are on board and no doubt will have had a hand in shaping Oval’s future. Before they were brought in Oval was not looking much further than the next three years. But recent developments have led the broker to believe that it should be focusing on the bigger picture – and that’s where the five year plan comes in to play.
If Oval can pull off a mega deal, the float will be put on hold, possibly to 2015. It could be a smart move given the potential of added support from investors come the time it hits the stock market. But for Hodson the concern is whether anyone has an appetite for such a deal.
The likes of Giles, Jelf, Heath Lambert and possibly Bluefin are all brokers that fit the bill and the kind of deals Hodson would like to make. But can he pull it off? Senior market figures have predicted that consolidators will eventually get together. Hodson himself says there are too many brokers in the UK market.
“If you did a map of insurance broking all you would say is there are too many brokers and you need to strengthen. Common sense says that while there are too many insurers there are too many brokers and yes that has got to reduce.”
The economy will decide Oval’s path – but like Oval – it is unpredictable.
See story: Oval looks for mega merger.