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One of Canada's largest mutually held insurers is looking at a potential sale, and at least one analyst thinks Intact Financial is a likely buyer.

Economical Mutual Insurance Company said this week it plans to demutualize via an initial public offering or a sale to a strategic buyer. The price tag is likely to be more than $1.5-billion.

Economical, which insures cars, homes and businesses, has already received at least one offer, according to this report on the demutualization plan.

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There could be numerous bidders, CIBC analyst Paul Holden said in a note to investors Wednesday, adding "we think the business is a good fit for Intact, based on its acquisition criteria."

A sale is a more likely outcome than an IPO, based on Mr. Holden's estimates. He said that an IPO would likely value Economical at around book value, which is $1.5-billion.

"However, we think a strategic investor with a strong underwriting platform, such as Intact, would be able to offer a premium to book value," he wrote.

A bid would likely force Intact to raise funds by selling shares. Intact has about $1-billion in capital, implying an equity issue of more than $500-million.

Economical has been battling dissident policy holders who are trying to throw out the board and launch a demutualization plan of their own.

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