THE remote prospect of Irish Life leaving state hands any time soon receded further yesterday, after a planned flotation of a UK insurance company met with less demand than had been hoped.
Direct Line, an insurance business owned by Royal Bank of Scotland, will price at some £2.6bn (€3.3bn) when it goes public next month.
Irish Life boss Kevin Murphy had indicated that the success or otherwise of the Direct Line IPO would give an indication as to what appetite there could be for a company like Irish Life on the open market.
Analysts had expected RBS to look to raise between £2.7bn and £2.9bn on Direct Line. The discount disappointed the market, with one analyst reportedly describing the deal as "priced to go".
The lower price equates to a valuation of only 1.13 times' the book value of the car and home insurer, well below rivals such as RSA, which trades at around 1.7 times.
RBS takes dividends of around £1bn a year out of Direct Line, but given its own financial difficulties -- the company is 83pc owned by the UK taxpayer -- it needs to shrink its balance sheet and reduce its commitments.
Like Irish Life, Direct Line has been on the block for sometime.
A number of trade buyers looked at the company, and at one stage it looked like it might be sold for as much as £6bn, but that deal fell through after RBS collapsed and had to be rescued by the British government.
The lower price for Direct Line came a day after a German insurer postponed its IPO.
A fortnight ago, Irish Life reported strong interim results, with profits increasing more than 600pc.
Mr Murphy, however, ruled out any hopes of a sale in the short term and market watchers expect it to be 2014 at the earliest before the pensions giant returns to private control.
A company spokesman declined to comment yesterday.