Speculation over Cox take over of Highway as chief executive jumps ship
Cox Insurance Holdings this week poached Highway Insurance chief executive Andrew Gibson, fuelling rumours of a possible takeover bid.
Gibson will become Cox's new finance and operations director.
Neil Utley, Cox's group chief executive, said: "The priority is to get our house in order but I wouldn't rule it out as a possibility in the future. Once the company is delisted, acquisitions are certainly part of the plan."
Previous merger talks between the two companies collapsed in March 2004 amid speculation that Cox lacked the necessary capital reserves to satisfy Highway's shareholders.
But according to one market analyst, Utley's backing from private equity firms Englefield and Duke Street, and the decision to delist from the London Stock Exchange would place Cox in a stronger financial position to approach Highway again.
The analyst said: "There is a lot of synergy between the two companies, in terms of business model, processes and now personnel."
Chris Hill, new managing director of Highway Insurance Company, said: "As a publicly owned company we would consider any potential bid and recommend it to share-holders if we believed it was attractive, but we have not got a for sale sign up."
Cox Insurance will be officially renamed Equity Insurance Holdings in January 2006.
Cox in Lloyd's break-away rumour
Andrew Gibson's appointment has led to market speculation that Cox may be looking to break away from Lloyd's. Gibson is a financial specialist best known for taking Highway out of Lloyd's in 2002.
Neil Utley said: "We are very happy with Lloyd's and, providing costs stay down, we will remain in the market for the foreseeable future."
Such a move would leave only two dedicate motor insurers left at Lloyd's - Jubilee and KGM.
According to analyst Mazars: