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There has been a lot of press about the price Colonial Limited paid for the Australian operations of Legal & General. With the rise in Colonial’s share price in recent months, at current prices does Colonial still represent good value or is there now a degree of risk attached to it?

By Intelligent Investor · 5 Jun 1998

By Intelligent Investor ·
5 Jun 1998

The market certainly seems to be willing to trade insurance and banking stocks at a premium at the moment. In our view though, the stock is currently fully priced. Only time will tell if Colonial paid too much for its Legal & General purchase. Despite the attractiveness of access to the increased customer base, initial indications are that it is at the very least a fully priced acquisition. This is not to say that we are concerned about Colonial's prospects, we merely think the share price needs a breather while the market digests the L&G acquisition.

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