Analyst Morningstar says there is no guarantee Swedish private equity firm EQT’s bid for AUB Group will proceed – but if it doesn’t, more buyer interest is likely.

As insuranceNEWS.com.au has reported, listed group AUB has received a non-binding indicative proposal for the acquisition of 100% of its stock at $45 per share, which sees the company valued at $5.25 billion.

“The price represents a 20% premium to our fair value estimate,” Morningstar says in a note.

“While it would be disappointing to see another high-quality business leave the ASX boards to private equity, at least they’re not bagging a bargain.”

Morningstar says the AUB board “appears satisfied with the proposed price”, having entered into a confidentiality and exclusivity agreement, with six weeks of due diligence from October 8.

“There is no certainty a deal will proceed, but given the resiliency of earnings and growth opportunities, we think there is a good chance EQT will like what they see.”

Morningstar says the risk of the deal not proceeding should not put off investors.

“Owning shares in an above-average firm with positive earnings outlook, and potentially more buyer interest likely, means shareholders just waiting longer to be paid.”