ING Canada weighs bid for Aviva assets: report

TORONTO (Reuters) - ING Canada Inc IIC.TO is weighing a bid for the Canadian operations of Aviva Plc (AV.L), the National Post reported on Wednesday, citing unnamed people familiar with the matter.

Officials at both ING Canada, which was recently spun off by its Dutch parent, and Aviva's Canadian arm declined to comment.

The report said bid preparations are at a very early stage and could be called off, but are gathering pace as the credit crisis puts pressure on the British parent to raise capital.

The newspaper added that there was no indication the two sides were close on price and it was unclear if an agreement could be reached.

ING Canada shares were up 22 Canadian cents, or less than 1 percent, at C$31.72 on the Toronto Stock Exchange late on Wednesday morning. Shares of British life insurer Aviva were up 7.2 percent in London.

Aviva earlier this month maintained its dividend as 2008 results broadly met expectations. But its shares fell by a third to a record low as investors fretted the decision may prove reckless.

ING Canada shares stumbled last month after former parent ING Groep NV (ING.AS) said it had struck a deal to sell off the last chunk of what had been its controlling stake in the Canadian property and casualty insurer.

($1=$1.28 Canadian)

(Reporting by Jeffrey Hodgson; Editing by Peter Galloway)