Italian bank UniCredito is in advanced talks to buy Germany's number two lender HVB Group for 16 billion euros ($20.1 billion), the Wall Street Journal reported on Friday.
Similar rumors swept the markets on Thursday, with traders talking of a bid worth 22 euros per HVB share. HVB shares rose as much as 7 percent on the speculation, closing at 20.17 euros.
The 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 and would be Europe's largest ever cross-border banking deal.
Those people were also quoted as saying key issues were still being discussed and that the deal could still fall through.
Nobody at UniCredito was immediately available to comment on the WSJ 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, as did a spokesman for HVB.
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.
