LONDON (Reuters) ? Leading European reinsurers Munich Re, Hannover Re and Swiss Re will be interested in acquiring the ailing Bermuda-based life reinsurer Scottish Re, say industry players and analysts.

Scottish Re has said it is looking at the possibility of either selling itself or finding an investor to pump in cash after it hit a liquidity crunch following a big second-quarter loss, and European firms would feature prominently on the list of potential buyers.

?In terms of potential bidders Munich Re, Swiss Re and Hannover could all be interested,? said William Hawkins, insurance analyst at Keefe, Bruyette and Woods in London.

Scottish Re, which was a rising star in the life reinsurance market before its recent problems triggered ratings downgrades and a slump in its share price, would offer these firms a potentially attractive franchise in the lucrative United States life reinsurance market.

Despite being major global players, both Munich Re and Hannover Re are underweight in the US life reinsurance market, analysts said.

Both companies have said they are willing to consider making acquisitions and Hannover Re said earlier this month it was mulling making a bid for Scottish Re.

A Munich Re spokeswoman declined to comment on whether it was looking at Scottish Re, but said that, in general, it was interested in bolstering its presence in life reinsurance markets where it lacked a strong presence, which include the United States.

But Munich Re has stressed it is only interested in acquiring life reinsurance portfolios, rather than entire companies, its spokeswoman said.

Scottish Re is more likely to attract a reinsurance buyer, a senior industry executive suggested.

The executive, who declined to be named, said it was doubtful that Scottish Re would attract an investor willing to pump cash into the company, so its only choice may be to sell off all or part of its portfolio.

A portfolio deal would also attract Swiss Re, which is already a major player in the US life market. Its ?admin re? unit, which effectively assumes portfolios from insurers through a complex reinsurance transaction, rolled out a string of major deals in the early 2000s, but has not done a major transaction for some time.

?I?m sure Swiss Re would love to get this business on its books,? the reinsurance executive said. ?They didn?t have a major deal at all last year and doing this would show its admin re machine is still rolling along.?

Scottish Re?s chief financial officer Dean Miller is also a former senior executive at Swiss Re, which could help to put the reinsurer on the inside track in a bunch race to do a deal for the Bermuda firm, analysts said.

A Swiss Re spokesman declined to comment.

But Scottish Re?s perilous financial situation may put off bids from these companies, analysts suggest.

?The sticking point for all these companies would be Scottish Re?s financial situation. There?s likely to be a chasm between the strategic attractiveness of a deal and what the firms would be willing to pay for that,? said Hawkins.

?My personal view is that it would be very difficult to bridge that gap.?

Scottish Re?s investment banking advisors, Goldman Sachs and Bear Stearns, are in the process of preparing a prospectus for potential bidders, market sources said.

?Until that comes out it?s impossible to say what the level of interest will be,? said an executive at a private equity firm that invests in insurers.

?It?s going to be very difficult for them to skin this deal in the right way? to attract a wide number of bidders, he said.

Scottish Re declined to comment on possible interest from Munich Re, Swiss Re and Hannover Re and said it continued to look at strategic alternative on an ?accelerated timeline?.