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Zurich may make RSA bid
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December 27, 1999: 8:02 a.m. ET
Reports: Anglo-Swiss insurer lines up $11B bid for ‘undervalued’ U.K. insurer
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LONDON (CNNfn) - Reports that Zurich Financial Services is eyeing a 7 billion pound ($11.27 billion) bid for Britain’s Royal & Sun Alliance (RSA) sent shares in the Anglo-Swiss insurer sharply higher Monday.
Weekend press reports in London said Zurich Financial valued RSA shares at around 490 pence each. The stock closed up 1 percent Friday at 408 pence, with London markets closed Monday for a public holiday.
Zurich Financial shares climbed almost 2 percent to 913 euros in Zurich Monday.
Zurich Financial, which is also quoted in London as Zurich Allied (ADZ), is viewed by analysts as keen to boost its share of the U.K. market. RSA shares are viewed as undervalued despite the company’s strong presence in Britain, Scandinavia, Australia and North America.
RSA, Britain’s second-largest general insurer after CGU, has been in play following a sharp slump in its shares.
RSA’s stock has slumped more than 17 percent this year. While analysts said the outlook for earnings was improving, its shares are still seen as a bargain.
Paribas recently upgraded RSA to a strong buy, noting that it was trading at an 18 percent discount to its net asset value. This compares with an average of a 62 percent premium among European insurers.
Zurich Financial, which ranks among the world’s top five general insurers with premiums of $45 billion last year, declined to comment on the reports. RSA had premiums of 5.06 billion pounds last year.
Germany’s Allianz (FALV) and Italy’s Generali are also believed to be interested in RSA. 
-- from staff and wire reports
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