UPDATE 1-Alleanza's Intesa Vita stake valued at 706 mln eur

* Stake valuation in line with market expectations

* Alleanza H1 net profit down 57 pct

* Shares up 1.06 pct

(Adds details, background, shares)

MILAN, July 29 (Reuters) - Italian insurer Alleanza Assicurazioni SpA's ALZI.MI 50 percent stake in its Intesa Vita bancassurance joint venture, which it is selling, is valued at 706.4 million euros ($999.3 million), it said on Wednesday.

Alleanza, in which main owner Assicurazioni Generali (GASI.MI) is buying out the minorities, is selling the stake because it is disappointed with sales of insurance products via venture partner Intesa Sanpaolo's (ISP.MI) bank network.

"Tillinghast (independent expert) ... has communicated its own determination of the amount that Intesa Sanpaolo should pay to Alleanza following the exercise (by Alleanza) of its put option on 50 percent of Intesa Vita," Alleanza said.

The valuation is in line with a 710 million euros figure reported recently by daily Il Messaggero and an over 700 million euros figure which Generali officials had foreseen.

In a statement on its first-half results, Alleanza gave no details on when the payment would be made.

Earlier, Intesa and Generali both declined to comment on an unsourced report in Il Messaggero that said part of the payment would be paid by Intesa through the transfer of a 6.99 percent stake in Banca Generali (BGN.MI), worth 49 million euros.

A broker said he expected the rest to be paid in cash and not in real estate, as had been speculated at one point. He added Alleanza's results give a first indication on the state of the life sector ahead of Generali's results, due Friday.

Alleanza's first-half net profit fell to 147.1 million euros, down 57.4 percent, and net premiums were 1.250 billion euros, up 10.4 percent, the company said.

One analyst with a Milan broker had forecast net profit of 117 million euros and premiums of 1.225 billion euros.

At 1117 GMT, Alleanza stock was up 1.06 percent at 5.2450 euros.

($1=.7069 Euro) (Writing by Nigel Tutt; editing by Simon Jessop)