Irish Life is still for sale despite market turmoil
THE Government is still intent on pressing full steam ahead with its ambitious plans to sell Irish Life, the life assurance arm of Irish Life & Permanent -- even though the ongoing volatility in the worldwide stock markets is likely to push any price tag secured for the insurer well below the €1.7bn mark it was initially valued at.
"We're still pressing ahead with the sale of Irish Life," confirmed a spokesman from the Department of Finance last week. "And we are impressed with the level of interest."
Irish Life is likely to be sold through a trade sale by early 2012, according to industry sources. The Government is also exploring the prospect of a stock-market flotation.
The European debt crisis has sent stock markets into turmoil this year, delaying many big flotations.
Last week, the Spanish government delayed the planned sale of its famous El Gordo national lottery until stock markets improve. It had hoped to raise €7.5bn in the sale. And Manchester United also recently put on hold its ambitious plans for a €700m flotation on the Singapore exchange, reportedly due to market volatility.
Many stock market analysts now believe it could be difficult for Irish Life to secure a buyer in the current economic climate -- particularly at the right price.
"Obviously it is better to sell into a rising market where there's more confidence," said one Dublin-based banking analyst. "If the Government was able to wait until the European debt crisis was resolved, it would maximise the value of Irish Life in any sale."
There are about two weeks left in the second round of bidding for Irish Life, with one or two bidders expected to eventually emerge as serious contenders.
Sunday Indo Business