Bidders are circling the property specialist

Shares in Erinaceous rose 15% yesterday, reaching 253p, as the group confirmed that discussions with potential bidders were ongoing.

The confirmation at the property specialist’s annual general meeting came as it emerged that HBOS had made an indicative offer of 300p a share. This would value Erinaceous at £320m.

Other potential bidders are also thought to be in the frame. These are private equity firm Bridgepoint and property tycoon Vincent Tchenguiz.

It is not clear whether they will seek to out bid HBOS, which has been seen as the front runner since it put its hat into the ring in May.

Tchenguiz, who is thought to be particularly interested in Erinaceous's ground rent operations and its property insurance business, could still trump HBOS.

Erinaceous’ insurance division is one of the largest property brokers in the UK.

There has been speculated that HBOS or Tchenguiz would be able to generate greater cost savings and could justify a higher price for the company than a financial buyer.

Last month private equity firm 3i withdrew its interest in supporting a management buy-out of the group.

It is widely believed that Erinaceous chief executive Neil Bellis and chief operating officer Lucy Cummings, who own almost 20% of total shares in the company, are unhappy with the group being listed.

Some also suggest that a string of 12 acquisitions in the last year have proved difficult to integrate.

Erinaceous has seen its share price fall from over 360p at the beginning of 2007.

At time of writing, the group’s shares were trading at 221p.