By Jamie Freed and Alexander Hübner
SYDNEY/FRANKFURT (Reuters) - German insurer Allianz (DE:ALVG) has made an informal approach to Australian peer QBE Insurance (AX:QBE) to canvass its interest in a takeover deal, according to a source familiar with the situation.
The source, who was not authorised to speak publicly about the matter, told Reuters no acquisition price had been proposed to QBE, Australia's biggest insurer.
German newspaper Handelsblatt on Sunday reported Allianz had floated an offer of A$15.00 per share, which would value QBE at A$20 billion (12.02 billion pounds). QBE shares rose by 4.7 percent to $A12.91 on Monday.
Allianz declined to comment. QBE said in a statement on Monday it was not in discussions with Allianz or any other potential buyer.
QBE, one of the world's 20 biggest insurance companies, operates in North America and Europe as well as in Australia and New Zealand.
The company is an attractive target because it will benefit from a higher interest rate environment, said Shaw and Partners analyst David Spotswood.
“I don’t think QBE would agree to a A$15 takeover bid," he said. That is not very high. Presumably there would be cost savings and claims management savings. In a two-year view they could probably get to A$15 by themselves.”
Allianz Chief Executive Oliver Baete has said the German insurer is looking for opportunities to make acquisitions but that it is not easy to find attractive targets at a reasonable price.
The company said in November it could return 2.5 billion euros ($2.68 billion) from its budget for acquisitions to shareholders in the form of share buybacks.
M&A has cooled off in the insurance sector after a bumper year in 2015, with many players saying valuations had become too high.
But Australia is an attractive market for foreign insurers because the population and economy are growing faster than in most other developed markets and the regulatory regime is more stable than in emerging markets.
($1 = 1.3270 Australian dollars)
($1 = 0.9336 euros)