According to Goldman Sachs Group analysts, record European bank takeovers and a strengthening German economy make Dresdner an attractive target for reappraisal. This could help increase Allianz shares to 203 euros ($272) in the next year, 15% above today's price. The stock is still nearly 40% below its level on April 1, 2001, when the Dresdner purchase was announced.
While Allianz CEO Michael Diekmann said as recently as February that his company and Dresdner are staying together, some investors expect him to change course, reminiscent of when Daimler shed its Chrysler unit last month after refusing to consider it publicly until early this year. Cash from Dresdner would allow Allianz to return capital to shareholders and buy carriers in Europe and Asia.
“Any change in Allianz's attitude of categorically ruling out a sale of Dresdner could only help the share price,'' said Ernst Konrad, the Munich-based head of equities at BayernInvest, which oversees $35 billion, including Allianz shares. “Allianz is among the cheapest insurance stocks in Europe.''
Dresdner has been a drain on Allianz up to now. The 117-year-old insurer bought the bank with the aim of selling more insurance products through its branches. Mounting loan losses at Dresdner and falling stock markets led to the insurer's first annual loss since World War II in 2002.