Shares in UK broker Jardine Lloyd Thompson Group (JLT) jumped nearly 10% yesterday as rumours of an impending merger with major rival Heath Lambert Group swept through London’s financial circles.

JLT hasn’t confirmed the move, but media reports are emphatic a deal has been done. JLT has been anxious to bulk up in the high-end commercial broking market through acquisition. One other rumoured takeover target was another mid-sized UK-based international, Benfield. And that may yet come to pass, too, as the latest phase in market consolidation sees the mid-ranked brokers under pressure.

The deal is reportedly worth £130 million ($320.8 million.) The stockmarket thinks it’s likely to be a good move, with one investment analyst saying a merger would lead to a 25% rise in earnings through the loss of up to 400 jobs.

London media reports said yesterday that Adrian Colosso, Heath Lambert’s CEO since March last year, is expected to walk away from the merger with a cash, shares and pension payout worth millions of pounds. MD Mike Bruce and non-executive Chairman Keith Hamill will reportedly be given about £5 million ($12.3 million) in cash and shares as part of the deal.

The deal won’t have any direct market impact in Australia. Marsh bought out Heath Lambert’s Australian, NZ and Papua New Guinea operations in March 2004.