A decision on whether SunLife & Provincial will sell New Ireland Assurance is likely to be taken within the next four weeks, after New Ireland set an October 7th deadline for the receipt of bids. A decision by SunLife & Provincial (SL&P) - which owns 83 per cent of New Ireland - is likely to be taken within a matter of weeks of New Ireland receiving bids. While New Ireland managing director, Mr Jack Casey warned that SL&P has not yet taken a strategic decision to sell New Ireland, most in the industry believe that a sale - which could value New Ireland at more than £200 million - is the most likely result of the current review by SL&P.
Mr Casey said that SL&P has a number of options with New Ireland. One of these was to sell enough shares to bring the SL&P stake from 83 per cent to 75 per cent, the minimum free float allowed by the Stock Exchange.
Another option is to buy out the minority shareholders and make New Ireland a wholly-owned subsidiary, while a third option is to set up a joint venture with another institution in which SL&P would have a stake of around 50 per cent.
Mr Casey would not indicate what was the most likely option for SL&P, but most in the industry believe that, when the review is complete and bids are received, a sale of New Ireland to another Irish-based financial institution is most likely.
"A number of interested parties have been asked to put a price on New Ireland. When prices come in, SunLife will decide whether to sell," said Mr Casey He added that New Ireland had initially received approaches from companies which approached the group over the previous two years.
Various groups, including Irish Life, Irish Permanent, Ulster Bank and a number of life assurance companies have been mentioned as likely bidders.
Since news broke that SL&P was considering a sale, other approaches had been made, he added. Mr Casey added that Davy Stockbrokers and Deloitte & Touche had been enlisted to advise on bids received.
Half-year results from New Ireland show that the group is in good shape for a sale, with pre-tax profits up from £4.9 million to £7.9 million. While the 1997 figure includes a £2 million profit on the sale of Irish National, this is effectively cancelled out by the £1.98 million underwriting losses notched up by Irish National in the first half of 1996.
Stripping out tax, loan interest and minority interests, profits rose from £2.87 million to £5.76 million in the first half. "The increase in earnings per share from 26.7p to 53.5p is a real increase," said Mr Casey.
Annual premium new business sales jumped almost 10 per cent to £13.25 million. Overall, life and pensions gross written premiums rose by 11 per cent. New Ireland Financial Services, the IFSC business, increased its profits from £640,000 to £1.44 million with funds under management up from £1.8 billion to £2.2 billion.
