The stake, comprising 8 million shares bought at around 23p each, was acquired as an investment in the food manufacturing sector, said Mike Firth, chairman of Yorkshire. Hobson's share price was up 1p to 21p yesterday.
Mr Firth hoped the disclosure would damp down recent speculation about Yorkshire's intentions towards Hobson, which recently paid pounds 111m for the Co-Op's food manufacturing operations.
He declined to confirm some recent industry rumours that Yorkshire was looking to buy some businesses from Hobson, which is headed by Andrew Regan, son of Roger Regan, who is nursing the Spring Ram bathrooms and kitchens company back to health.
The Co-Op deal was funded by the issue of almost 300 million Hobson shares.
Yorkshire was also forced to announce its holding because the pounds 1.84m value of the stake, relative to the company's pounds 54m market capitalisation, is a declarable Class 2 transaction under Stock Exchange rules.
The more general disclosure rule does not operate until one company's holding in another reaches 3 per cent.
Yorkshire shares held at 121p.