BOURNEMOUTH friendly society, LV=, has offered £150m to buy out a national car insurance specialist.

LV= subsidiary, Liverpool Victoria Insurance Company Limited, has had its 75p per share offer accepted by the board of Highway Insurance Group Plc which is based in Essex and has offices across the country.

Prior to the deal Highway's shares had slumped to under 50p at the time of the offer, after its profits plummeted from £11.8m to £1.4m and LV's offer represents a premium of about 47 per cent.

The offer saw its shares rise by 14 per cent to 73 pence this week.

Highway's shareholders have 28 days to respond and it is anticipated that the deal will be completed by the end of October.

Mike Rogers, group chief executive of Liverpool Victoria Friendly Society Limited, which has its head office at County Gates, said that the takeover of Highway is the latest in a series of strategic acquisitions that LV= has made over recent years.

The Bournemouth mutual bought start-up insurer ABC Insurance established by Churchill founders John O'Roarke and Peter Horton, two years ago.

Mr Rogers added: "General insurance is central to LV's growth plans and our stated ambition is to become a top-five insurer in our chosen markets by 2012.

"This transaction has the potential to accelerate that aim, giving us considerably greater scale in the broker channel."

Highway has been established for more than 50 years and employs 800 staff.

It has 650,000 customers representing £260m in insurance premiums this year.

In contrast, Liverpool Victoria Friendly Society Limited was established in 1843 as a burial society and today employs over 2,500 staff serving more than 2.5m customers and members.

With assets of £8bn last year, it generated £347m in premiums.