L&G shares rise on Zurich bid talk

Legal & General shares jump to a 12-month high as the latest bout of takeover speculation suggests Zurich is considering a bid for the UK insurer.

L&G shares gained 2.7p, or 2.9%, to 95.99p as traders reported talk of bid interest from Zurich Financial. 

This extends a recent run which has seen the stock rise from 87p, boosted by its well received half-year results earlier this month. They traded at 67p a year ago.

Takeover speculation has raged in the insurance sector since Aviva rejected a £5 billion bid approach from RSA for its general insurance business last week.

Aviva shares fell 4.6p or 1.1% to 392.7p after a surge yesterday caused by reports that French insurance giant AXA was considering a bid for its life business. This would give AXA a huge presence in the UK savings markets a month after it sold its traditional UK life businss to Resolution for £2.75 billion.

Resolution fuelled the excitement yesterday when it repeated its ambition to buy another life insurer or a fund manager in the UK. This could signal its interest in F&C, the fund manager in which activist investor Sherborne has built a stake.

By 12.40 more than 15.3 million Legal & General shares had traded compared with the average daily volume of 24.4 million.

After a bright start the FTSE 100 traded 34 points, or 0.64%, lower at 5,350 after oil stocks fell in response to an increase in US oil inventories. BP slipped 5.4p or 1.3% to 402.6p.