Chubb In Talks To Acquire Hiscox Plc

January 24, 2001

Chubb Corp. confirmed that it is in talks with U.K. insurer Hiscox Plc to acquire the remaining 72.3 percent of the company which it doesn’t already own; it’s preliminary offer values the Lloyd’s insurer at 170 pence a share for a total of £251 million ($369 million).

Chubb took a 27.7 percent stake in Hiscox in 1998 when it purchased the interest of investment fund Trident Capital. Insurance analysts have speculated that it was only a matter of time and market conditions before it sought to acquire the rest.

Hiscox does business both as a general insurer and as a Lloyd’s member. It’s president, Robert Hiscox, is one of Lloyd’s best known underwriters. Its specialized commercial lines business in D&O, kidnap, ransom and extortion has been highly successful recently, winning praise for its innovative products, and its ability to manage risks.

Chubb competes directly with AIG in offering similar lines in the U.S. and internationally. Acquiring Hiscox would give the New Jersey-based group a very strong position in the U.K., especially in the Lloyd’s market.

No firm agreement has yet been reached.” Discussions with Hiscox are at a preliminary stage, and Chubb has not yet had the opportunity to complete its due diligence on Hiscox,” said a company statement.

Meanwhile Hiscox shares rose as high as 213 pence ($3.14) on the London market, considerably above the 170 pence ($2.50) Chubb announced as its initial offer.

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