Life assurance group New Ireland Holdings has confirmed that its parent, SunLife & Provincial Holdings, is considering approaches to buy the Irish group. The board of New Ireland said in a statement yesterday that its majority shareholder "is at a preliminary stage in considering a range of options for its shareholding in New Ireland Holdings, including responding to approaches received from parties who may be interested in acquiring the business".
Earlier this week The Irish Times reported that New Ireland might be put up for sale and it is understood that a number of companies are interested in purchasing it.
The statement yesterday said that the process of considering its options may take SunLife & Provincial some time and it has not yet reached any decision on what it will do.
With SunLife & Provincial holding 83 per cent of the shares, the remaining shareholders are in a strong position, in the event of any offer for New Ireland. While the shares did not trade yesterday, the offer price rose to £21, a price at which New Ireland would be valued at £210 million.
Any bid for New Ireland would have to win the approval of its parent SunLife & Provincial, itself owned by insurance giant AXA. But to be able to compulsorily acquire all the remaining shares, any bidder would also have to get its bid accepted by 80 per cent of the remaining minority shareholders, measured by share value, and 75 per cent by shareholder number.
This puts the minority shareholders in a strong position, as reflected by yesterday's increase in the bid price.
Its last trading price was £16, which would value the company at around £170 million.
A sale of New Ireland would be likely to be by an open tender or some type of competitive bidding process. Among the likely bidders are Irish Life, Irish Permanent, Canada Life and Eagle Star.
The two big banking groups - AIB and Bank of Ireland - may also be interested, as a way of expanding their existing subsidiaries' stakes in the life assurance market. Insurers such as Hibernian and Norwich Union might also be interested.
New Ireland would offer any purchaser a significant market share and the group has also recorded strong investment performance. It has around 7.5 per cent of the annual premium business in the life assurance market and 14 per cent of the single premium business.
It has 7.2 per cent of annual premiums in the savings and protection market and 7.9 per cent of annual pension premiums.
Earlier this year, the group sold its general insurance subsidiary, Irish National, to Eagle Star and since then there has been speculation about a sale of the life assurance arm.
