DNB AND STOREBRAND IN TALKS TO SALVAGE COLLAPSED DEAL

Norway's Den norske Bank (DnB) and market-leading local insurer Storebrand are reported to be in emergency talks aimed at salvaging their planned merger, after the original deal collapsed on Saturday. The long-awaited merger, which was announced in late May, is understood to have foundered on a disagreement over price, after DnB's due diligence investigations uncovered larger-than-expected loan losses in Storebrand's private banking unit, Finansbanken. The discovery prompted DnB to reconsider its original offer to swap 1.33 of its own shares for each Storebrand share. However, Storebrand was at the same time raising its own due diligence concerns with DnB, leaving it unwilling to accept DnB's revised offer, which some analysts believe may have been as low as 1.2 DnB shares for each of Storebrand's. The originally agreed deal saw DnB effectively offering NKr15.9m for Storebrand, and would have brought to a close one of the country's longest-running takeover sagas, which began more than a year ago with DnB using its minority stake in Storebrand to block a friendly takeover bid for the insurer by Finland's Sampo. The move eventually prompted the Norwegian government to review the local laws that made DnB's veto possible, thereby putting the bank under pressure to push through its bid for Storebrand ahead of any legislative change.