LV in £150m bid for Highway

Liverpool Victoria has been named as the company which has bid for Highway Insurance. The offer values the entire issued share capital of Highway at approximately £150m.

Under the terms of the Offer, Highway shareholders will receive, for each Highway share held, 73.35 pence in cash. Highway shareholders will also receive the interim dividend of 1.65 pence per share with respect to the six months ended 30 June 2008 announced today.

The offer represents a premium of approximately 47 per cent to the closing price of 49.75 pence per Highway Share on 26 August 2008, being the last business day prior to Highway announcing that it was in discussions regarding a possible offer for Highway; and a premium of 45 per cent to the average of the closing prices over the 30 business days up to and including 26 August 2008 of 50.63 pence per Highway Share.

In a statement LV said it believes that there is "strong industrial logic" to a combination of Highway and LV’s general insurance businesses and that the acquisition will "help to accelerate LV’s ambitions in the broker underwriting channel, adding scale and expertise as well as broadening the product range".

Mike Rogers, group chief executive of Liverpool Victoria Friendly Society, said: “General insurance is central to LV’s growth plans and our stated ambition is to become a top five insurer in our chosen markets by 2012. This transaction has the potential to accelerate that aim, giving us considerably greater scale in the broker channel.

“Our general insurance management team has a strong track record of successfully acquiring and building businesses, and delivering value. Highway is highly complementary to our existing general insurance operations and will provide a strong platform for growth.

“This offer for Highway follows a series of strategic acquisitions we have made over the last couple of years, which have helped to transform the LV business overall and its future prospects.”

Andrew Gibson, group chief executive of Highway Insurance Group, added: “This transaction represents an attractive financial result for Highway’s shareholders.

“The Board also believes that this will be a good overall outcome for Highway’s customers and employees. Highway and LV share important values, being strongly relationship driven and committed to technical and service excellence. The combined business will also have greater resources to capitalise on opportunities in the broader general insurance market.”

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