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 their Frankfurt stock market debut on Tuesday, vindicating the company's decision to go ahead with the share sale after hesitating last month over the state of Europe's fragile IPO market.

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

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

The performance of Talanx's IPO, Germany's biggest since chemicals distributor Brenntag launched itself onto the 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 zone sovereign debt crisis as investors worry about the potential hit to the value of the government bonds in which insurers invest, as well as the long-term drag on performance from globally low interest rates.

But UK insurer Direct Line expects to price on or around Oct. 11 in what is expected to be the biggest IPO on the London Stock 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 and therefore will be of interest to a different type of investor," a Germany-based fund manager said.

Marcus Barnard, insurance analyst at Oriel Securities in London, agreed.

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

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

Chief Executive Herbert Haas said on Tuesday Talanx planned no large takeovers over the next two years and added that the insurer's owner, German mutual insurer HDI, would let its stake dilute over time to 50 percent plus one share.

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

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

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

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

Talanx has said it will use the cash raised to finance growth, particularly in industrial insurance and in emerging markets, as well as to repay loans linked to recent acquisitions in Poland. ($1 = 0.7749 euros)

(Reporting by Jonathan Gould, Arno Schuetze and Alexander Huebner in Frankfurt and Myles Neligan in London; Editing by Greg Mahlich)

(( 69 7565 1242)(Reuters Messaging:

Keywords: TALANX IPO/