RI3K sale talks 'premature'

Reports that Brit will sell its stake in electronic trading platform RI3K appear "premature" as the company will not reach its full potential for two years, RI3K's chief executive said this week.

It is understood Brit is in advanced talks with at least four potential bidders for its 85.6% stake in the company.

But Alex Letts said: "RI3K was not profitable in 2005, and is not yet profitable, so the suggestions about new investment may relate to strengthening the balance sheet and ensuring that RI3K is in the best possible shape for the crucial three-year period ahead as the market moves to full electronic placement."

It is understood corporate adviser Lexicon Partners has been instructed to seek interested parties, under codename Project Silver.

Brit is continuing its strategy of divesting non-core activities which led to the sale of its fund manager Epic Investment Partners for £5.5m last month.

The reason for the sale, a Lloyd's source said, is that Brit chief executive Dane Douetil feels that Brit's ownership of RI3K could be construed as a conflict of interest as he is chairman of the market reform group.

The group is targeting all-electronic placement by 2009 under Acord standards and RI3K has been tipped as the natural successor to Lloyd's failed Kinnect project.

Brit has already pumped £20m into RI3K which reported a £4m loss in its 2005 accounts.

Brit refused to comment on the sale.