Bid speculation sends Hogg shares leaping

BID speculation drove shares in Hogg Group, the insurance broker, up 23p to 205p yesterday after the company said it had received preliminary possible approaches from a number of parties.

The approaches followed last week's news that Hong Kong and Shanghai Banking Corporation's shareholding had jumped to 6 per cent from less than 3 per cent.

Anthony Howland Jackson, Hogg's chairman and chief executive, said the company made its announcement to the Stock Exchange as markets opened at the request of the Takeover Panel following widespread speculation in the weekend press about a possible bid.

'I can't obviously discuss who the various parties are but I can say that there has been no formal approach. There have been several expressions of interest which may or may not lead to an offer.'

Hogg's shares rose 24p last Thursday to 165p when news of the increased holding by HSBC, through its insurance broking subsidiary GIH, hit the stock market. Following yesterday's further share price rise Hogg is now valued at pounds 128m or pounds 40m more than it was last Thursday.

Hogg shares had been in the doldrums since the company warned in January that its 1993 profits would fall more than 50 per cent to pounds 6m because of an unexpectedly poor performance in its US broking activities. It also said the final dividend would be cut, reducing the total from 8.15p to 5.65p.

Analysts said GIH was a smaller operation than Hogg. But virtually any of the well-known insurance brokers could be interested in acquiring Hogg at the right price as long as they could fold Hogg's existing business into their own without taking on the accompanying overheads.

The analysts said an agreed bid could be struck at between 220p and 225p but if a bidding war broke out the price could go to 250p valuing Hogg at pounds 156m.