August 28, 2008 / 7:20 AM / 10 years ago

UPDATE 1-Highway Insurance agrees 150 mln pound takeover

(Adds detail on offer, share price reaction)

LONDON, Aug 28 (Reuters) - British motor insurer Highway Insurance Plc HWY.L has agreed to a takeover by mutual society Liverpool Victoria Insurance Company in a deal worth around 150 million pounds ($276 million), the companies said on Thursday.

Liverpool Victoria is offering 73.35 pence per share, plus the interim dividend of 1.65 pence, to give a total 75 pence cash per share.

Highway shares were up 14 percent at 73 pence early on Thursday.

The offer represents a premium of about 47 percent to Highway’s closing price of 49.75 pence on Aug. 26, the day before Highway announced it was in advanced takeover talks with a single party, a statement that sent its shares up nearly 30 percent.

Liverpool Victoria said there was “strong industrial logic” to a combination of the two general insurance businesses.

The deal had the potential to accelerate Liverpool Victoria’s aim of being a top five insurer in its markets by 2012, it said.

Highway Insurance CEO Andrew Gibson called the offer “an attractive financial result” in the statement and said the combined business would have “greater resources to capitalise on opportunities in the broader general insurance market”.

Highway separately reported on Thursday that its first-half pretax profit fell to 1.4 million pounds from 11.8 million a year ago. (Reporting by Rosalba O’Brien, editing by Will Waterman)

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