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Generali shares jump on report of Intesa, Allianz interest

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(Reuters) — Shares in Assicurazioni Generali S.p.A. rose strongly on Monday following press reports that Italian banking group Intesa Sanpaolo S.p.A. and Germany’s Allianz S.E. were interested in a possible investment in Italy’s biggest insurer.

La Stampa newspaper reported on Sunday and again on Monday that Intesa was studying the potential investment in Generali, which could be part of an accord with Allianz.

Under the scheme, the German insurer could buy some of Generali’s assets, while Intesa could invest between €5 billion and €6 billion ($5.35 billion to $6.42 billion) to protect Italian interests in the insurer, the paper said.

Intesa and Allianz declined to comment.

Monday morning, shares in Generali were up more than 5%. Traded volumes were above the past month’s daily average.

Generali's market value of €21 billion ($22.56 billion) is less than half what it was at the onset of the financial crisis in 2007-2008. The company has repeatedly been at the center of takeover speculation, with France’s Axa often cited in the press as a possible buyer.

La Stampa said Allianz had already explored a bid for Generali last summer but had decided not to pursue it because of Axa’s interest.

Allianz’s CEO Oliver Baete said earlier this month the insurer favored a “big takeover” because buying small companies would not make sense.

Analysts were skeptical about a possible three-way tie-up, saying it would likely trigger antitrust concerns in Italy for both the German insurer and the Italian bank.

Allianz, with a market capitalization of more than €70 billion ($74.9 billion), is already the third-largest insurer in Italy.

Intesa also has an insurance business Intesa Sanpaolo Vita, a market leader in private pension plans.

“Given the market share that Intesa Sanpaolo has reached in the life business a deal could raise antitrust problems,” broker ICBPI said in a note.

Generali’s biggest shareholder is Milanese investment bank Mediobanca, which has pledged to cut its 13% stake to 10% and has said it could reduce it even further.

Jean-Pierre Mustier, CEO of Mediobanca’s major shareholder UniCredit, said in an interview this month that it was important for the country that Generali remained Italian and that Mediobanca had to preserve the insurer’s independence.