Withdrawal by Unum means only three bidders vying for Irish Life
Published 19/10/2011 | 05:00
TENNESSEE-based life insurance giant Unum has bowed out of the race to buy Irish Life Assurance, leaving just three bidders in the field.
News of Unum's withdrawal emerged last night as Irish Life & Permanent's advisers Deutsche Bank received second-round bids for the plc's life insurance arm.
Unum was on a shortlist of five bidders after first-round offers, along with Canada Life Ireland, CVC, Delphi Financial and a joint bid by JC Flowers and Apollo Global Management.
Delphi Financial subsequently withdrew; the Irish Independent understands Unum also failed to lodge a second-round bid by yesterday's deadline.
"We make it a point not to comment on rumours or market speculation," the company's spokesman said yesterday.
A spokesman for the Department of Finance declined to comment, citing the confidentiality of the bid process, as did a spokesman for Irish Life & Permanent.
Irish Life Assurance is being sold off to contribute to a €3.8bn capital demand levied on its parent company by last March's banking stress tests.
The Government has already pumped €2.7bn into the group, giving it a 99.8pc shareholding. If the sale of Irish Life and other actions don't raise the remaining €1.1bn, more State cash will have to go in.
The on-the-market life insurance business has an embedded value of €1.6bn, but bids are expected to come in well below this level, with some likely to come in below the €1bn mark.
The Government had hoped to complete the sale by the end of the year, but sources now suggest that early next year looks "more likely".
If offers aren't sufficiently attractive, the Government may favour putting more cash into Irish Life & Permanent itself and not selling the life insurer.
Irish Life & Permanent has also publicly said it is developing plans to float the life insurance business on the stock exchange, though market sources say that would be very difficult in the current environment.