By Jason Woolfe
Lloyd's insurer Hiscox denied the Chubb Corporation was stalking it for a hostile takeover.
The US giant increased its stake in the London specialist insurer to 28.3% from 27.7% in a recent share offering.
But a friendly bid could succeed if the board of directors were persuaded to sell its stake, estimated at about 20%.
Analyst David Wharrier of Fitch Ratings said Chubb had decided its interests lay in holding a large stake, but was not pursuing an aggressive takeover.
But he said it could make a non-hostile bid, if it persuaded the board or any other major shareholders to sell.
Chubb is already the largest shareholder in Hiscox and mounted a takeover bid last year.
If its stake is increased to 29.9%, it will be obliged to make an offer for the company.
Hiscox chairman Robert Hiscox told Insurance Times:
"I do not believe they are preparing to pounce.
"The last time they approached us they were very civilised and said they would not be hostile. If they did, they would lose a lot of goodwill."
Robert Hiscox said the growth of Chubb's stake resulted from it underwriting the share offering on 18 December. Together with other shareholders, it acquired shares that would otherwise have been unplaced.
The offering resulted in about 94% of the shares being placed.