Insurance giant Howden is reportedly set for a US takeover deal which could lead to a £23.2bn stock market float, according to Sky News.
The British insurance broker, founded by David Howden, anticipates finalising a £7.73bn ($10bn) takeover of American private insurance broker and risk management adviser, Risk Strategies, in the next few weeks, the broadcaster reported.
It could then eventually lead to a stock market flotation which could see the business valued at more than £23.2bn ($30bn), Sky said, between one and three years – likely 2027 – insurance experts said.
Howden, the broadcaster reported, is pursuing a binding agreement on the acquisition, which is supported by US private equity firm Kelso, before the end of March, with the expected £7.73bn cost price partly financed by a share sale worth some £3.1bn ($4bn).
According to banking sources, Sky said, Abu Dhabi-based sovereign investment fund, Mubadala, and existing Howden shareholder, Hg Capital, could inject around £1.5bn ($2bn) each into the London-based Howden ahead of the landmark deal.
The new equity would see Howden receive an aggregate valuation for the combined group of around $30bn, Sky added.
Barclays and Morgan Stanley are said to be advising Howden, while Evercore is reportedly acting for Kelso and Risk Strategies.
Howden ‘success story’
It comes after founder Howden told City AM last month that his firm was a “phenomenal British success story” and “really big believers in the London market”.
Howden highlighted that his firm invested £1.6bn into the UK market over the last four years, employing over 7,000 people in the country.
The London insurance market is a “phenomenally important part of UK GDP”, so we’re all trying to get the UK GDP up, and the insurance market is one of the real success stories”, he said.
It came after his insurance broker firm announced that it broke the £3bn revenue barrier over the last financial year thanks to double-digit “organic growth”.
Howden has been approached for comment by City AM.