IL&P may need further €1bn after failed sell-off bid
Last night the board of Irish Life & Permanent Group Holdings plc (IL&P) decided to suspend the flagged sell-off due to what it stated was “continuing market uncertainty”.
The parent company claimed that when it announced its intention to sell its life assurance component it had “attracted significant interest from a broad range of potential acquirers”. It stated that each of the potential buyers “recognised the exceptionally strong franchise which the company has in the Irish market and the low-risk nature of the group’s business”.
But the board of & IL&P said the “current very challenging market conditions are not conducive to concluding a transaction of this size at this time” and it had made the decision to suspend the sale.
The statement said it will, however, continue to progress the separation of the group’s life assurance and banking businesses.
Irish Life is acknowledged as the market leader in the life, pensions and fund management businesses in this country. The company has almost 750,000 personal policyholders, 200,000 pension scheme members and more than €32bn in funds under management.
It also holds €704 million free assets, which is 175% of the minimum amount required under regulation.
The Department of Finance said it had confirmed to Irish Life & Permanent that none of the bids received for the assurance arm were acceptable at the present time.
A department statement said the “process attracted significant interest from a broad range of potential acquirers”, but the bids hadn’t been as high as hoped for.
“The very challenging market environment in recent days was not supportive to achieving an outcome that recognises the strength of the Irish Life business,” the statement said.
The Department of Finance said it would work with IL&P to complete the company’s capital requirements to meet tough new capital requisites under the EU/IMF bailout. Canada Life, a unit of Canada’s second-largest life insurer Great-West Lifeco, had been the lead candidate to buy the business, which has anestimated value of about €1.6bn.
