Highway Insurance is back on the market and in negotiations with at least two rival insurers interested in buying the company, according to market sources.
The motor insurer is understood to be talking to Fortis and Chaucer Holdings about acquiring the company for around 40p per share. This would value the company at just over £80m. As Insurance Times went to press shares were trading at around 35p.
The bid by Fortis could be the first step in an acquisition spree by the traditionally low-key insurer.
A market source said: "There is pressure from some of Highway's major shareholders such as Hambro Capital, which has about 15% of the company, to sell as they feel they have been involved for long enough."
The Fortis bid is understood to be the stronger of the two as it is cash based. Chaucer is reported to be putting together a bid based on a share offer. Other insurance companies are thought to be in the process of putting together rival bids.
A market source said: "Fortis is looking to the future and seeing there are really only two ways to grow, through affinity deals or acquisition. The broker market is not going to be able to offer Fortis the sort of growth it seems to be interested in so it is looking elsewhere.
"The parent company is not the sort of organisation that likes standing still."
After the market closed on Tuesday Highway put out a statement to the Stock Exchange saying it had "received approaches" from a number of parties. Chaucer and Fortis declined to comment.