Broking giant Marsh has approached its part-owned rival Heath Lambert with a view to a takeover.
According to reports over the weekend, Marsh made an approach last month and the two firms have signed confidentiality agreements. The deal is believed to value Heath Lambert at over £350m.
Heath Lambert shelved its flotation plan in June 2002 in the face of deteriorating market conditions. It would have valued Heath Lambert at between £406m and £469m.
A critical factor involved in a potential takeover is believed to centre on Heath Lambert's debt levels.
However, analysts believe Heath Lambert could now attract rival bidders including Willis and Aon.
A Marsh takeover would fit with its plans to expand its UK operations. Last year it held talks to buy reinsurance broker Benfield Group.
