Abbey Life for Sale
Abbey Life, the closed life insurance company, is being sold by Lloyds TSB for an estimated £1 billion.
There are reports of strong interest in the business from three contenders: Resolution, the life market consolidator, Swiss Re, the Swiss-based reinsurer, and Pearl Group.
All three are believed to have submitted indicative offers to Lehman and Morgan Stanley, who are handling the sale. The final shortlist is expected to comprise two or three preferred candidates.
Two hedge funds, Cerberus and Fortress Investments, have also been mentioned in connection with the sale, as has Blackstone, the private equity group.
Abbey Life should prove easy to sell because it is not part of Scottish Widows, the Lloyds TSB insurance division, although management of Abbey life funds has been outsourced to Scottish Widows.
The business, which was closed to new policyholders in 2000, contains approximately £12 billion in assets.
Lloyds TSB is expected to use the proceeds of sale to expand its retail banking business and also to make further investment in its wholesale unit.
Sector analysts have dismissed rumours that the disposal of Abbey Life preempts Lloyds TSB making a review of its Scottish Widows business.
Category: Insurance News, Lloyds TSB Insurance News
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