Broker approached by six fellow Lloyd's brokers
Lloyd's broker Thompson Heath & Bond (THB) is seeking a flotation price of 16p, according to chairman Vic Thompson.
He told Insurance Times that this would be his "reasonable" opening price when THB floats, possibly in late October or early November.
"If, say, Windsor is valued at 11p and Jardine Lloyd Thompson is 21p, we want to be somewhere in the middle. Roughly 16p would be reasonable," he said.
Thompson said potential institutional investors have until next Monday to sign up and the management team is seeing a further dozen this week.
The flotation would raise £5m for acquisitions, but the broker may try to raise more. Thompson confirmed that six fellow Lloyd's brokers had approached the company in the past month to discuss merger or acquisition opportunities.
"In a normal climate, we may get one broker approaching us in six months, but we have had six in one month. Many people out there are reconsidering their position.
"The London Market is going to be a place where size matters. You can be a niche broker at £2m-£3m but you will end up continually looking over your shoulder."
The company, which is ranked 43rd in the Insurance Times Top 50 UK brokers, hopes, through acquisition, to move from its present £12.2m in fee and commission income (2001) to £40m.
Though size matters, Thompson said the company would choose partners carefully.
"We are not going for a spending spree because that can be death and destruction for a business if the partners are wrong," he added.
He said he is confident THB's flotation would not run into the difficulties experienced by Heath Lambert group, which in July had to pull its flotation, blaming market volatility.
"Heath Lambert went to market in mid-July, which was probably one of the worst times in the stock market history," said Thompson.
He said the company could be tempted to expand into new areas if the right opportunities came along.
THB is known for its North American property and casualty writing, and media business.
It acquired TL Clowes group last year, which is known for its motor sport and particularly Formula One business.
The company plans to be listed on the London Stock Exchange's alternative investment market (AIM), allowing it to sell a smaller stake than if it sought a listing on the main market. An AIM listing also carries tax advantages.
THB currently has no outside investors and is owned by about a third of its 250 employees.