St. Paul Travelers repeats denial of ZFS merger

SAINT PAUL, Minn.--St. Paul Travelers Cos. Inc. for a second time this year has publicly denied reports of an impending merger with Zurich Financial Services Group.

In March, the Wall Street Journal reported that the St. Paul, Minn.-based insurer was in talks to merge with ZFS, and a similar report surfaced on Thursday in the Swiss newspaper CASH.

In a statement, St. Paul said that while it normally adheres to a policy of avoiding comment on market speculation and rumors, "the recurring nature of these specific media reports, both nationally and internationally, has prompted the company to issue this denial again."

Bear, Stearns & Co. Inc. in a research note said it views the reported deal as "highly unlikely," although an alliance with ZFS could help balance St. Paul's U.S. and European exposures and might be viewed positively by some investors.