Benfield bosses in £14m stake sale

Directors at Benfieldcashed in more than £14m of shares yesterday as the reinsurance broker reached the end of its second lock-up period since it floated on the London market 17 months ago.

Directors at Benfieldcashed in more than £14m of shares yesterday as the reinsurance broker reached the end of its second lock-up period since it floated on the London market 17 months ago.

GE Frankona, part of General Electric's European insurance arm, also sold down its entire 6.7 per cent stake in the business, raising more than £43m.

Among the directors, Rod Fox, the head of the group's European operations, was the biggest winner, cashing in a further £5.9m of shares to add to the £1.5m he raised from the partial sale of his stake at the end of the first lock-up in December. Paul Karon, the chief operating officer of the group's US operations, cashed in more than £3.1m. David Spiller, the chief executive of the company's international operations, cashed in a further £1.6m to add to the £1.5m stake he sold in December.

Benfield bought back 6.45 million, or £17m, of the sold shares, placing the rest with institutional investors through Merrill Lynch. A source close to the deal said the placing was oversubscribed, with demand of more than £50m for the placing of less than £40m.

A spokesman for the company said that while several directors had cashed in some of their stakes in the group, Grahame Chilton, the chief executive, had not sold any shares.

The market reacted relatively positively to the placing, with shares in Benfield falling just 0.75p to 270.25p, giving the company a market value of £657m.

Last month, Benfield received a subpoena from the New York attorney general, Eliot Spitzer, requesting that the company help him in his investigation into the payment of contingent commissions in the insurance broking sector. Benfield said it is not subject to an official inquiry itself, however.