QBE Insurance has denied it has received a corporate proposal from German insurance giant Allianz after media reports suggested the two insurers had been in "informal talks" about a potential takeover.
German newspaper Handelsblatt reported overnight that Allianz chief executive Oliver Baete met with QBE boss John Neal before Christmas and suggested an offer of $15 a share, which would value the company at $20 billion.
Talks between the groups were friendly but there were no concrete negotiations about a deal yet, the paper said, citing sources.
But QBE on Monday issued a statement to the Australian Securities Exchange, confirming it was not in discussions with any potential buyers.
"While it is QBE's policy not to comment on rumour or media speculation, QBE confirms that it is not in discussions with Allianz or any other potential buyer," it said.
QBE shares opened at $12.79 on Monday, up 3.73 per cent from Friday's close of $12.33.
In a separate statement, the insurer said it had a "clearly articulated strategy that builds upon our differentiated position as one of only a handful of truly global insurers".
"Participation in industry consolidation is not a part of this strategy and there is no basis to speculation either that this strategy is under review or that QBE has received a corporate proposal," it said.
The AFR's Street Talk column last week said QBE was on the watch list of potential offshore acquirers.
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 was an attractive target because it would benefit from a higher interest rate environment, Shaw and Partners analyst David Spotswood said.
"I don't think QBE would agree to 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 $15 by themselves."
According to media reports, Allianz's Mr 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 ($3.5 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.
and Reuters