* ASX 200 jump to 3-week high
* Transfield Services leap 26 pct, Medibank prospectus lodged
* NZ Sky City up 2.8 pct up (Adds analysis, quotes, stocks on the move)
By Cecile Lefort and Naomi Tajitsu
SYDNEY/WELLINGTON, Oct 20 (Reuters) - Australian and New Zealand shares rose around 1 percent on Monday, buoyed by takeover activity and improved sentiment after a solid round of U.S. data and earnings calmed investor nerves over signs of weakening global growth.
In Australia, financial stocks and diversified metals and mining firms underpinned the market.
The S&P/ASX 200 index climbed 51.6 points to a three-week peak of 5,325.8 by 0117 GMT, adding to a 0.4 percent gain on Friday.
Wall Street bounced strongly on Friday on the back of solid U.S. data and earnings, helping calm tumult in global financial markets and reassure investors worried about the health of the world economy.
The spotlight fell on management firm Transfield Services Ltd which jumped as much as 29 percent after the company said it had received an indicative offer from Spain’s Ferrovial SA.
Transfield’s stocks hit a high of A$1.94 and last traded up 26 percent at A$1.89, compared to the A$1.95 per share bid that Transfield said undervalued the company.
Engineer firm Downer EDI added to takeover activity by announcing the purchase of gas, power and water infrastructure contractor Tenix Holdings Australia for A$300 million ($263 million). Downer EDI’s shares gained 3.4 percent to A$4.18 percent.
Sentiment got a further boost from the much anticipated lodging of Medibank Private’s prospectus. The health insurer proposed to raise between A$4.3 billion and A$5.5 billion, potentially making it the largest listing of a state-owned company in nearly two decades.
It plans to sell up to 2.75 billion shares in a range of A$1.55 to A$2.00.
“Towards the lower end of the wide range at A$1.55, it looks attractive. Towards the top end, it looks fully priced,” said Peter Esho, a managing partner at 100 Doors, a wealth management firm in Sydney, seeing Medibank as a long-term investment.
“It’s a high quality business, a market leader in terms of market share and a business that will deliver incremental growth benefits over a period of time. It won’t be immediate,” he said.
Across the Tasman sea, New Zealand’s benchmark NZX50 index rose 59.8 points or 1.1 percent to 5,206.8, after a bounce in U.S. equities last week inspired investors to pick up top-10 shares.
Driving the market was a 2.8 percent climb in Sky City Entertainment Group to a one-week high of NZ$3.68($2.91), as the casino operator extended gains made late last week, when it announced a jump in revenue at its flagship Auckland operation.
Fletcher Building rose 1.9 percent to NZ$8.65, recovering from a nine-month low of NZ$8.48 hit last week, as the construction materials maker which earns a hefty portion of its revenues from overseas has suffered from speculation about slowing global growth.
Air New Zealand also pushed 1.9 percent higher to a one-week high of NZ$1.86, clawing further away from a seven-month trough of NZ$1.75 hit last week.
(1 US dollar = 1.1418 Australian dollar)
1 US dollar = 1.2617 New Zealand dollar Editing by Shri Navaratnam