TH: RSA share price in focus as Zurich confirms interest
Zurich, one of the world's biggest insurers, said in a brief statement that it was "evaluating a potential offer" for RSA but cautioned that it may not make a bid.
RSA, which has a market capitalisation of 4.4 billion pounds, declined to comment when contacted by Reuters.
RSA climbed 12 percent to 490 pence at 8:14 a.m.in London trading, extending gains this year to 11 percent and valuing the company at 5 billion pounds ($7.8 billion). The British insurer's shares surged as much as 14 percent.
The company noted that the announcement does not amount to a firm intention to make an offer and that there can be no assurance that any offer will be made.
After multiple profit warnings, triggered in part by an accounting scandal in Ireland, RSA hired ex-RBS boss Stephen Hester to lead a turnaround effort.
Commenting on the talk, Shore Capital analyst Eamonn Flanagan said "Zurich has surplus capital it wishes to deploy and has looked at RSA in the past, we believe".
Zurich is Europe's third-largest insurer and revealed last year it had at least $3bn (£1.9bn) of excess capital to spend on deals.
In other top gainers, GKN added more than 6 percent after the British engineering company said it had agreed to acquire Netherlands-based Fokker Technologies for 706 million euros ($781 million), including debt, to strengthen its position as a supplier to aeroplane manufacturers. "Scandinavian insurance markets have oligopolistic characteristics, with few market players and strong profitability with low levels of competitions".
