Highway figures looking tasty

Could Highway Insurance be back on the menu? That is the question dealers have been asking themselves this past week.

The specialist motor insurer, which rebuffed a takeover approach from rival Chaucer in April, was driven higher last week after its interim pre-tax profits more than doubled.

However, hopes that the group could still be gobbled up flared again as stockbroker Arbuthnot Securities placed 12 million shares, worth 5.9% of the company, at 55p each.

Although Chaucer is trading at around a four-year high of 58p, dealers reckon it could still be interested in buying Highway. KBC Peel Hunt research analyst Charles Coyne suggested: "It may be the case that others (Cox?) eventually revisit Highway to effect a deal."

Keefe, Bruyette & Woods, meanwhile, suggested that although Benfield has just unveiled plans to complete the £11m remaining of its £40m buyback programme, "we see a possibility that the buyback could be

cancelled if management finds another investment opportunity post-Katrina". As Insurance Times went to press, Benfield was trading at around 300p a share.

Hiscox too was in focus, up to 196p - a new four-year high. In response to better-than-expected interim results, ABN Amro upgraded the Lloyd's insurer from hold to add.

' Yvette Essen is stock market reporter and insurance correspondent for The Daily Telegraph