By Scott Kanowsky
Investing.com -- Saga (LON:SAGA) has said that it is in exclusive talks with Australia's Open Insurance Technologies over a potential sale of its underwriting business.
In a statement on Friday, the U.K. group that specializes in providing travel and financial services to over-50s confirmed earlier media reports that it was in negotiations with Open. It described discussions as ongoing, adding that any disposal of its Acromas Insurance Company division would require both regulatory and shareholder approval.
Shares in Saga gained more than 4% in early European trade, but remain lower by over 44% in the last one-year period.
According to Sky News, Open has been working to persuade investors to put forward capital to help fund the purchase.
The price of the deal could be worth up to £90 million (£1 = $1.2097), the Sunday Times newspaper previously reported, which would be roughly equal to Acromas' estimated net asset value of about £85M.
Saga stated in January that it has concluded that the sale of Acromas would help "crystalize value and enhance long-term returns for shareholders." Acromas currently underwrites about 25% to 30% of its total insurance operations.