Broker signals desire to sell to Steadfast

Broker signals desire to sell to Steadfast | Insurance Business

Broker signals desire to sell to Steadfast

Central Insurance Brokers director Phillip Smith has signalled he is keen to resume talks with Steadfast over plans for the network to acquire a stake in the business.

The proposal was brought to the table last year but the deal was unable to be completed before the Steadfast IPO. The network's public listing is on the cusp of being completed, with an IPO share price set yesterday at $1.15 per share and open trading due to start on ASX tomorrow.

Smith told Insurance Business: “Steadfast approached us about our succession plan and presented us with a number of options. They were very interested in our franchise model and buying an equitable stake in the business but we ran out of time to secure the deal before the IPO but we don’t mind waiting until the time is right for Steadfast.

“We will talk to Steadfast in the next four months about Central. Central is already a member of the network and the network is a proven winner.”

Smith used Steadfast’s signalled interest to make changes within the business, asking broker team leaders, who already owned up to 50% of their individual books of business, to either buy their entire books or sell them.

Of the eight broker teams, three teams bought their entire books and two bought up to 50% of their books. All four migrated to Reliance Partners, and four stayed with Central, with an additional team due to start imminently. Smith’s 67% share in the business grew to 100%.

Asked how much of a stake he was prepared to sell to Steadfast, he said: “We have no problem having some participation in its IPO programme (equitable interest) and we are quite flexible as to how much.”

He added: “We’re very excited about the restructure, it’s given us absolute autonomy to introduce new business initiatives, otherwise it’s business as usual; same name, same location, same business culture.”