Leaked IAG UK memo reveals approaches from trade buyers and work on sales prospectus.

See also: The IAG memo

IAG UK chief executive Neil Utley has set out a timetable for the sale of parts of the business and moved to reassure staff as trade buyers line up for a bidding war with the company’s management.

In an internal memo leaked to Insurance Times, Utley confirmed the insurer had received approaches from a number of trade buyers and was compiling a sales prospectus.

In July IAG announced the sale of its Hastings, Advantage and Equity Insurance Brokers business. It is holding on to Equity Red Star, Equity Direct and Barnett & Barnett.

Swinton and Heath Lambert and Zurich have been mooted as possible trade buyers. Towergate is not thought to be involved, despite links between Utley and Towergate executive chairman Peter Cullum.

A management buy-out involving Utley and backed by private equity is also believed to be on the table. Richard Brewster, finance director of Equity Group, and Edward Fitzmaurice, chief executive of Hastings and Equity Direct, are understood to be leading the MBO.

IAG is expected to announce its full-year results to the Australian stock exchange tomorrow and outline plans for the business.

“IAG will only look to sell these businesses if they receive a price which reflects fair value to the brands.

Neil Utley

It is possible that fellow Australian insurer QBE will renew its bid for the IAG group.

In his memo to staff, sent on Monday, Utley said: “For the last few weeks, we have been developing material to present to potential purchasers. This will be finetuned over the next three weeks or so. Once this material is complete, it is likely that we will commence verbal presentations to the interested parties mid September.

“Once these have taken place, there will be a period where interested parties can submit bids.

“We hope that this part of the process will be concluded towards the end of November, with the formal legal signing-off towards the end of the calendar year.

“IAG will only look to sell these businesses if they receive a price which reflects fair value to the brands.

“Our consultations with staff at Manchester and Leicester on the potential transfer of work to Bexhill are continuing on plan. We expect to be able to publish the final timetable by October.”

IAG’s UK broking operations control more than £400m in premiums.