Macquarie, the Australian banking and finance powerhouse, is weighing a £5bn-plus takeover bid for M&G, the FTSE-100 fund manager and insurer.

Sky News has learnt that Sydney-listed Macquarie is at the early stages of exploring an approach to M&G, which has a market capitalisation of just over £5bn.

Any formal bid for M&G would represent the culmination of years of takeover speculation surrounding the former UK arm of Prudential.

Last Friday, its shares shot up close to 10% amid vague market chatter about an offer from an unidentified suitor.

City sources said that Macquarie had yet to make an approach to M&G's board and cautioned that premature public disclosure of its interest could yet prompt it to decide against a formal offer.

Macquarie is said to be being advised by Morgan Stanley, while M&G would be advised on any offer by its retained advisers Goldman Sachs, Bank of America and Evercore.

The valuation of any proposal is unclear, with a typical 30% takeover premium potentially making an offer worth as much £6.5bn.

M&G manages almost £350bn of assets, and holds stakes in virtually every significant London-listed company.

A former sponsor of the annual Chelsea Flower Show, it has also become a substantial investor in infrastructure assets through its Infracapital arm.

M&G was a title sponsor of the RHS Chelsea Flower Show over many years

Macquarie's most recent financial results showed it managed assets of A$773bn (£434bn).

The Australian group would be unlikely to seek to retain M&G's insurance operations, with analysts suggesting on Wednesday night that it could partner with an acquirer of that business or seek to sell it after a takeover completed.

Insiders touted the London-listed insurer Phoenix Group as an obvious prospective buyer of M&G's insurance business, although it is not thought to be involved in any live discussions about such a deal.

If Macquarie does make an approach to M&G's board, it would stoke further debate about the extent to which UK companies are being left to the mercy of foreign and private equity

Ironically, M&G fund managers recently highlighted the fact that historically weak share prices - despite the recent performance of the FTSE-100 index - had left many British companies vulnerable to overseas bids.

Macquarie has been one of Britain's biggest inward investors for many years, snapping up assets in energy and infrastructure.

In 2017, it acquired the Green Investment Bank from the UK government.

It now employs more than 1,700 people directly in London and Edinburgh, as well as approximately 63,000 at the companies in which it has invested.

Any bid for M&G would test the resolve of the company's new chairman, Edward Braham, a former senior lawyer at Freshfields Bruckhaus Deringer.

The company also only recently appointed a new chief executive - Andrea Rossi, a former chief executive of Axa Investment Managers.

In 2021, Bloomberg News reported that Schroders had seriously contemplated an offer for M&G, although the potential bidder's chief executive, Peter Harrison, subsequently said he had decided against doing so on the basis that he did not want to damage its culture.

It later emerged that Schroders had been working with Rothesay Life, the privately held specialist insurer, and Paul Thompson, the insurance entrepreneur behind Utmost Group, to carve M&G up.

Macquarie and M&G both declined to comment.