(Bloomberg) — RSA Insurance Group Plc surged by the most in sixyears after Switzerland's Zurich Insurance Group said it wasconsidering making an offer, stirring speculation the Britishcompany could attract another suitor.

RSA may fetch about 563 pence a share, or about 5.7 billionpounds ($8.8 billion), according to Panmure Gordon & Co.analysts. The stock jumped as much as 15% to 504.5 pence in Londonon Tuesday. Allianz SE, Europe's biggest insurer, and France's AxaSA may also bid for RSA, whose shares have trailed peers in thepast year, analysts said.

“RSA is now effectively in play,” said Barrie Cornes, an analystat Panmure with a hold rating on the insurer. “Others will nowplace the slide rule over the company that has for many many yearsbeen a perennial takeover story.”

The talks are a sign a revival in mergers among Europeaninsurers is beginning to gain momentum. Dealmaking has been crimpedin recent years amid a cloud of uncertainty about how much capitalinsurers need to hold under the latest round of rules known asSolvency II.

A deal would be Zurich's biggest since 2000 and let ChiefExecutive Officer Martin Senn, 58, expand in the U.K. and LatinAmerica as well as access RSA's profitable Scandinavian andCanadian units. Zurich reiterated in May that it would redeploy $3billion of surplus capital by the end of 2016.

28-Day Deadline

Zurich fell as much as 3.5%, the most in three months, and wasdown 1.1% to 293.1 francs in Swiss trading for a market value of43.9 billion francs ($45.5 billion). The stock has fallen almost 6%this year.

Zurich said in a statement Tuesday its deliberations don't“amount to a firm intention” to make an offer. Under the U.K.takeover rules, the company has 28 days to make a formal offer orwalk away for six months unless RSA consents to an extension.

RSA said in response it hasn't held talks with, or received aproposal from, Zurich and advised shareholders to take no action.The insurer reports first-half results Aug. 6.

Daniel Bischof, an analyst at Baader Helvea in Zurich said acompeting bid from others including both Allianz and Axa couldn't“quite be written off.” Spokesmen at Axa and Allianz declined tocomment.

For RSA, a takeover would cap a tumultuous two-year period forthe insurer which has included an accounting scandal in Ireland in2013, Simon Lee's departure as CEO, a stock sale and a spate ofasset disposals to shore up the balance sheet. Stephen Hester, theformer CEO of Royal Bank of Scotland Group Plc, took the reins atRSA last year.

Worst Performer

Before today, RSA's stock was down 4.6% over the past 12 months,the worst performer in the nine-member FTSE 350 Nonlife InsuranceIndex, which gained 15% in the period.

The three-century-old company focuses on household and auto aswell as commercial property and liability cover. The insurer posteda pretax profit of 275 million pounds in 2014, compared with a lossthe previous year.

A takeover of RSA, formerly known as Royal & Sun Alliance,would be the biggest acquisition of a U.K. insurer since Aviva Plccompleted its 5.4 billion-pound purchase of Friends Life Group Ltd.in April.

RSA's 3.1 billion-pound pension fund deficit may yet present ahurdle to a deal which has deterred some insurers from makingformal offers in the past, according to people with knowledge ofthose discussions who asked not to be identified because theyweren't authorized to speak publicly.

“The transaction could still make sense,” said Sami Taipalus, aLondon-based analyst at Berenberg. “With a group as big as Zurichthe pension liabilities don't really matter.”

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