REFILE-UPDATE 1-Talanx shares rise in IPO debut

(Repeats to fix fault in text formatting, adds dropped word'before' in paragraph 2.)

* Shares rise in biggest German IPO since 2010 * Talanx IPO eyed in run-up to British Direct Line IPO * Talanx CEO says no big takeovers planned in next 2 years

FRANKFURT, Oct 2 (Reuters) - Shares in Talanx ,Germany's third-biggest insurer, opened higher in theirFrankfurt stock market debut on Tuesday, vindicating thecompany's decision to go ahead with the share sale afterhesitating last month over the state of Europe's fragile IPOmarket.

Shares in the group started trading at 19.05 euros per shareon Tuesday, up on the offer price of 18.30 euros, before easingback to trade at 18.69 euros by 0858 GMT.

Talanx, which has wanted to float its shares for more than adecade, surprised markets last month by announcing its IPO onlyto then cancel it, and then reviving it again within days afterinvestors convinced the company that they would buy the sharesafter all, despite showing a tepid interest initially, after apick-up in global share markets.

The performance of Talanx's IPO, Germany's biggest sincechemicals distributor Brenntag launched itself ontothe market in 2010, comes just ahead of Royal Bank of Scotland's

IPO of its Direct Line insurance arm.

Insurers have been trading below book value in the euro zonesovereign debt crisis as investors worry about the potential hitto the value of the government bonds in which insurers invest,as well as the long-term drag on performance from globally lowinterest rates.

But UK insurer Direct Line expects to price on or aroundOct. 11 in what is expected to be the biggest IPO on the LondonStock Exchange for over a year.

The Talanx and Direct Line IPOs were very different,however, investors said.

"Direct line is much bigger and has a higher free float andtherefore will be of interest to a different type of investor,"a Germany-based fund manager said.

Marcus Barnard, insurance analyst at Oriel Securities inLondon, agreed.

"The only read-across is the investor appetite for newissues which is pretty low at best - if you cut the price lowenough, it'll probably get away," Barnard said.

Talanx's offer price was as the lower end of its 17.30 euroto 20.30 euro price range.

Chief Executive Herbert Haas said on Tuesday Talanx plannedno large takeovers over the next two years and added that theinsurer's owner, German mutual insurer HDI, would let its stakedilute over time to 50 percent plus one share.

Asked at the listing ceremony about Talanx's dithering onthe flotation, Haas highlighted the difficult role of being thefirst large company to list this year.

"If you are an ice breaker, you have to slalom to find theright way through drift ice", Haas said.

The insurer pared back the originally planned volume ofaround 700 million euros ($903 million) and late on Monday saidit planned to raise at least 467 million euros in the IPO.

Talanx, which owns a 50.2 percent stake in the world'sthird-largest reinsurer, Hannover Re , was aiming tosell 25.5 million shares in the flotation with an additional 2.7million earmarked in a so-called greenshoe option.

Talanx has said it will use the cash raised to financegrowth, particularly in industrial insurance and in emergingmarkets, as well as to repay loans linked to recent acquisitionsin Poland.($1 = 0.7749 euros)

(Reporting by Jonathan Gould, Arno Schuetze and AlexanderHuebner in Frankfurt and Myles Neligan in London; Editing byGreg Mahlich)

(([e-mail])([phone])(ReutersMessaging: [e-mail]))

Keywords: TALANX IPO/