City buzzing with talk of Zurich Financial offering £4.8bn for car insurer

Admiral's shares bounced late yesterday and today on talk of a takeover from Zurich Financial.

Down 11p initially, the shares rallied 10p better at 1561p on talk yesterday of a Zurich Financial swoop.

The shares peaked at 1574 today before dropping back down to 1560p.

Rumours are circulating that Zurich Financial is willing to offer £18-a-share for Admiral.

Founder Henry Engeldhardt has a fortune of around £592m tied up in the business, the Daily Mail reports.

Zurich bought into AIG's autoinsurance business last year, although it has scaled back its capacity in the UK with rate rises of around 20% last year.

Admiral has performed remakrably well this year, despite bodily injury claims biting hard into the balance sheets of most UK motor insurers, posting a half-year combined operating ratio of 87%.

An Admiral spokesman said: "We do not comment on market rumours."