Lloyds TSB rebuffs £8bn Widows offer

Lloyds TSB, Britain's fifth-largest bank, has knocked back another approach for its life and pensions arm, Scottish Widows, valued at around £8bn.

Swiss Re and Axa are believed to have been behind the latest approach, joining forces to try to persuade Lloyds to split up the Widows business. Axa had hoped to buy Scottish Widows' open operations, while Swiss Re was trying to pick up the company's closed life book.

The approach is the latest in a string of unofficial bids for Scottish Widows over the past few months. Resolution is believed to be among a number of companies to have expressed an interest in the business. However, the group's senior management remain reluctant to sell the division - a move which could open up the bank to takeover bids itself.

The latest approach will increase pressure on the company to consider a sale, with some shareholders keen for the group to offload the business.

A spokesperson for the group said yesterday: "We're very committed to Scottish Widows - it's a core part of the group. But we do not comment on market speculation or rumour."

Companies such as Swiss Re and Resolution are keen to persuade Lloyds to sell Scottish Widows, as it holds one of the few remaining large closed with-profits funds. However, the management have fought off the approaches, claiming that the business is now firing on all cylinders and is not up for sale.

Scottish Widows went though a rough patch in the first few years after it was demutualised and bought by Lloyds TSB in 2000, with its brand and profits both taking a hammering. The low point came when the Financial Services Authority fined Lloyds £2m, and ordered the company to pay another £98m in compensation, for mis-selling a Scottish Widows structured investment product.

News of Swiss Re's latest approach for Scottish Widows comes just days after it snapped up the UK arm of General Electric's financial services arm for £465m. It is believed to have beaten Deutsche Bank and South African financial services group Sanlam to the prize.