Steadfast shares continue to trade at a level that could make the company a takeover target, analysts say, after a newspaper report suggested a private equity firm is interested in a possible buyout. 

The Australian DataRoom column this morning says there’s talk Blackstone is assessing a possible Steadfast transaction. More specific details were not provided. 

The speculation follows AUB Group’s announcement on Monday that it is no longer in discussions with private equity firms EQT and CVC Asia-Pacific on a proposed transaction.  

Steadfast shares were up 1.5% to $5.08 this afternoon, giving a market capitalisation of $5.6 billion, but they remain at depressed levels relative to trading history over the past 12 months. 

The shares were above $6 in late October before slumping on concerns about a weaker market and news that CEO Robert Kelly was standing aside while an employee complaint was investigated. He returned to work on November 18. 

“For the first time in a long time I think the business is cheap,” Morningstar analyst Nathan Zaia told insuranceNEWS.com.au. “The business is solid and its earnings outlook is positive.” 

Despite premium pricing pressure in parts of the market, analysts say broking remains attractive, and potential buyers looking at the sector could consider Steadfast. 

“Opportunistically you could see why people would have a look,” another analyst said. “It takes more for a deal to be done, but it’s definitely possible”. 

Analysts say the AUB and Steadfast networks and brokerage ownership structures create challenges for private equity firms looking to complete deals, but the firms are also able to take a longer-term view.