Troubled insurer Homeserve’s shares rocketed today despite it swiftly playing down talk of a private-equity swoop.
Reports of approaches for the emergency plumbers and electricians company from buyout houses Cinven, KKR and Apax was met with a terse statement from Homeserve that “it has not, nor is currently, engaged in any discussions which could lead to a possible offer for the company”.
Despite the denial, the City decided the reports put the insurer in play and piled into the shares, sending the stock roaring 16%, or 26.6p, higher to 193.6p.
The rise offered rare respite for beleaguered investors who have seen the company hammered by a potential mis-selling scandal which emerged last October. Homeserve, which has three million customers, suspended British telesales last year to address concerns internally over how its policies were being marketed and sold.
In May the firm admitted the Financial Services Authority is investigating and admitted that the debacle will cost up to £35 million over the next two years.
In April, regulator Ofcom also fined it £750,000 for making 50,000 silent or abandoned calls to UK households in only two months.
Since the crisis erupted nine months ago nearly two thirds of the value of the business has been wiped out.
The 12% stake of chief executive Richard Harpin, worth £195 million at last year’s peak, has been slashed to £75 million.
