Storebrand Slides as Gjensidige Starts Selling Stake: Oslo MoverAlastair Reed and Saleha Mohsin
Storebrand ASA fell the most in a month in Oslo as Gjensidige Forsikring ASA sold shares in Norway’s second-largest insurer and reclassified its holding as a financial investment, prompting speculation about more divestments.
Storebrand, based in the capital, dropped as much as 4.5 percent, the most since Sept. 19, and traded 3.9 percent lower at 34.77 kroner ($5.88) as of 11:48 a.m. That makes the stock the biggest decliner on the Stoxx Europe 600 index. About 14.6 million Storebrand shares have been traded today, more than 11 times the average daily volume during the last three months.
Gjensidige, Norway’s largest insurer, sold 19 million Storebrand shares, equivalent to a stake of about 4.2 percent, at 34.75 kroner apiece, it said in a statement today. The insurer will also “redefine the investment in Storebrand from a strategic to a financial investment,” it said.
Shares in Gjensidige gained as much as 3.6 percent, the most in eight months, and traded 2.8 percent higher at 100.7 kroner in Oslo. About 560,000 shares have been traded today, almost 15 percent more than the three-month average daily volume.
Gjensidige, which now owns about 20.1 percent of Storebrand, will probably further reduce its stake, Oslo-based Pareto Securities AS said in a note.
“While our view on Storebrand remains the same, we expect this to put a downward pressure on the share price in the short term,” Pareto said. “We currently have a buy recommendation and a target price of 44 kroner” on Storebrand.
Gjensidige won’t make any further comment on the sale until it reports its third-quarter results on Oct. 22, Oeystein Thoresen, a company spokesman, said by phone today.
The insurer, which is seeking to cut costs and boost earnings as it tries to boost market share, is expected to report net income of 1.1 billion kroner, according to the average of seven analyst estimates compiled by Bloomberg. That’s down from 2.5 billion kroner a year earlier.