ANALYSTS FUEL M&A SPECULATION IN UK MARKET

Acquisition rumours are in overdrive on the London Stock Exchange (LSE). Following last week’s announcement that Royal & SunAlliance is soon to be free of its costly US liabilities, analysts began predicting that it would become more attractive as a takeover target, with one analyst going so far as to name UK-rival Aviva as a potential bidder although adding that it could face strong competition from insurers in continental Europe and the US. Elsewhere on the LSE rumour-mill, shares in Prudential surged 3% to 663.5p on Friday – its highest price since April – after speculation that French insurer Axa is interested in acquiring the group. Prudential is no stranger to takeover speculation after it rejected a £17bn offer from Aviva earlier this year. According to unconfirmed reports in The Observer over the weekend, Prudential has launched an internal review to asses the group’s options to sell, protect itself from takeover by making its own acquisitions, or dispose of certain non-core parts of its business.