Highway takeover revival
Hopes that Highway Insurance could be taken over flared up again, pushing the motor underwriter to a fresh four-year high.
The stock, trading at around 59p, benefited from a bullish 12-page note from Shore Capital, rating the shares a 'buy'. The stockbroker argued that Highway, which held unsuccessful bid talks earlier this year with Cox and Chaucer, "remains an attractive proposition for either private equity interest or another trade player".
Shore Capital said an added twist to the tale came from the resignation of "the highly capable and well regarded Andrew Gibson" as chief executive of Highway at the end of June, and his subsequent arrival at Cox as finance director.
Cox was taken private by Neil Utley with private equity backing from Duke Street and Englefield.
The stockbroker said: "There is a distinct possibility that Cox/Duke Street will bid for Highway before returning to the market ahead of a possible upturn in the motor insurance market."
Meanwhile, Legal & General was less popular, as Fox-Pitt, Kelton slapped an 'underperform' rating on the stock, on worries that "an increasing proportion of business being written is suffering as a result of competition and a change in product mix".
As Insurance Times went to press, the stock was trading at 111p.
' Yvette Essen is stock market reporter and insurance correspondent for The Daily Telegraph