Irish Life set to be sold within weeks following two-year search for a buyer
THE oft-delayed sale of Irish Life is now expected within a fortnight – for around €400m less than originally planned.
The country's biggest life and pensions provider, which has been on the block since late 2010, is about to be sold by Finance Minister Michael Noonan to Canada Life owner Great-West Life Assurance company.
Great-West is headed by Armagh-born Allen Loney.
The deal will end the State's association with the profitable life assurance company which must be sold as part of the clean-up of the financial services sector. The troika has repeatedly expressed disappointment about the delays which have bedevilled the sale.
The Government has come close to selling Irish Life several times since it was first put up for sale in 2011.
It was initially valued at €1.7bn in 2011 but the final price is expected to be close to the €1.3bn which the Government paid when it bought the business from Irish Life & Permanent last year. At one stage, the Government was reported to be exploring the prospect of a stock-market flotation, but plans turned to dust as the European debt crisis continued to erode confidence in Ireland's financial services sector.
The embedded value – or estimated value of its life policies – was close to €1.6bn at the end of June 2011.
The tortuous sales process hit a major speedbump during the crisis last year when the second round of bidding for the Life business drew just one bid of over €1bn. Great-West Life has been slugging it out with several other bidders over the past 18 months, including a private equity consortium made up of JC Flowers and Leon Black's Apollo Group.
Private equity firm CVC was also reported to be interested. Deutsche Bank was handling the sale.
Following stress tests in March 2011, it emerged that Irish Life & Permanent needed €3.8bn to meet regulatory capital requirements.
The Government ploughed in €2.8bn, leaving a shortfall of €1bn which was to be filled by the sale of Irish Life.
In January, Irish Life boss Kevin Murphy delayed his planned retirement at the age of 61 as the takeover talks edged closer to a deal. He has agreed to stay on "for some months" pending the appointment of a successor, according to a company spokesman.
The sale by Mr Noonan has been bitterly opposed by activist shareholders led by fund manager Piotr Skoczylas. Mr Skoczylas was elected a non-executive director of Permanent TSB.