UniCredito in talks to buy HVB for 16 bln euros

Italian bank UniCredito is in advanced talks to buy Germany's number-two lender HVB Group for 16 billion euros ($20 billion), The Wall Street Journal reported on Friday.

Talk of such a deal, which would be Europe's largest cross-border takeover, swept financial markets on Thursday, with traders talking of a bid worth 22 euros per HVB share.

Takeover talks between UniCredito and HVB have not advanced in recent months and are not in a final phase, a source close to the issue said on Friday. "The talks remain at the point they were a few months ago and they are not in the home straight," the source said.

The Wall Street Journal quoted people familiar with the matter as saying the banks had not yet fixed a price for the deal, which would probably be paid in stock.

Those people were also quoted as saying key issues were still being discussed and that the deal could still fall through.

A UniCredito spokeswoman declined to comment on the report. An HVB spokesman said he would not comment on market rumors.

On Thursday, UniCredito's Chairman Carlo Salvatori and Chief Executive Alessandro Profumo declined to comment on the market rumors of a takeover bid.

Speculation that UniCredito could bid for HVB has swirled for months, with analysts saying the two could be a good fit as they are both strong in Eastern Europe.