By Jason Rhodes and Jonathan Gould

ZURICH/FRANKFURT, Jan 11 (Reuters) - Swiss Life shares surged to their highest level in more than a year on Monday on speculation of a takeover bid from German rival Allianz that analysts said was unlikely.

Shares in the Swiss insurer rose as much as 10 percent, extending gains from late last week on the rumour, after French Internet site Wansquare on Sunday cited unnamed Swiss banking sources as saying Allianz was preparing a bid.

Swiss Life and Allianz declined comment.

Allianz's shares fell 1.1 percent to 87.04 euros by 1231 GMT, lagging a 0.6 percent drop in the DJ Stoxx index of European insurance shares, though analysts gave the bid rumour little credence. Swiss Life was up 7.6 percent at 155.70 Swiss francs.

Allianz, which said in November it planned no takeovers and no capital increase, is closely focused on preserving regulatory capital in the wake of the financial crisis, analysts said.

'Even though their solvency has been built up, I don't feel they're in an excess capital position,' said Joy Ferneyhough, insurance analyst at equity research firm Execution.

'Any deal would need to be equity-financed which would make it even more difficult to stack up financially, as well as being strategically not that exciting,' Ferneyhough said.

Swiss Life trades at about 10.4 times estimated 12-month forward earnings, a slight premium to Allianz's multiple of 8.3, according to Thomson Reuters StarMine, which weights analyst estimates according to their track record.

The two companies have significant overlap in Switzerland, France and Germany, which are relatively slow growing, and a deal could raise cartel issues in Germany, analysts said.

JP Morgan analyst Michael Huttner said Allianz did not need to buy access to Swiss Life's pensions broker AWD, through which Allianz already sells products.

'None of the arguments are compelling for doing a deal. There are lots of little negatives but nothing that's a big positive,' Huttner said.

SWISS LIFE A COSTLY TARGET

Though Swiss Life has a market capitalisation of about 3.1 billion euros, less than one tenth the size of Allianz at over 40 billion, a takeover would not come cheap.

The Swiss insurer's share price has nearly quadrupled since the March 2009 stock market low, outpacing a doubling in the share price of European insurers in the DJ Stoxx index.

Swiss Life also has a 10 percent anti-takeover voting right restriction that would make a transaction difficult or extremely expensive.

German insurer Talanx, currently Swiss Life's largest shareholder with 8.5 percent, said in March it would buy 8.4 percent of German pensions specialist MLP from Swiss Life and take a stake in the Swiss life insurer as part of a strategic partnership.

Talanx could pose a further stumbling block to any bid by domestic rival Allianz as a takeover would also give it control of German financial adviser AWD, which Swiss Life bought from colourful entrepreneur Carsten Maschmeyer in 2008.

The deal made Maschmeyer, who regularly features in Germany's gossip columns alongside glamorous partner and actress Veronica Ferres, Swiss Life's biggest shareholder before he was trumped by Talanx.

His stake remains above 5 percent and he is still a Swiss Life non-executive director, a Swiss Life spokesman said.

Swiss Life said giant asset manager Blackrock had 3.71 percent in the company as of Jan.9. Reuters data show Blackrock had 4.2 pct of Swiss Life on Dec.8, while Maschmeyer had 7.3 percent.

For a graphic comparing Allianz with Swiss Life, click on:

http://graphics.thomsonreuters.com/0110/EZ_ALSL0110.gif

(Additional reporting by Myles Neligan in London; Editing by Jon Loades-Carter)

($1 = 0.6983 euro)

(Zurich Newsroom, zurich.newsroom@reuters.com, +41 58 306 7336)

COPYRIGHT

Copyright Thomson Reuters 2010. All rights reserved.

The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.

 ALLIANZ SE Aktienkurs

 SWISS LIFE Aktienkurs