Scottish Life halts US talks and seeks rival bids

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The Independent Online

Scottish Life, the mutual insurer, has halted talks with America's GE Capital and entered negotiations with at least two rival bidders in a move to drive up its price.

Scottish Life, the mutual insurer, has halted talks with America's GE Capital and entered negotiations with at least two rival bidders in a move to drive up its price.

An auction of the respected Edinburgh-based company is expected after industry experts and Scottish Life insiders are understood to have thought GE Capital's offer of £1bn for the mutual was too low.

GE Capital, the financial services arm of the US conglomerate General Electric, is unhappy that Scottish Life had widened its negotiations with suitors but yesterday it said talks could resume next week. However, sources said Scottish Life did not want to reopen negotiations with the Americans.

Ned Cazalet, the independent insurance analyst, said GE Capital's offer may have been "too skinny" as Scottish Life is under pressure to recommend a deal that will offer substantial windfalls to members in the wake of bumper pay-outs from other demutualising insurers.

Scottish Life said yesterday that no other specific offers were on the table but other interested parties would receive financial details and are expected to make detailed offers in the near future.

The mutual is thought to be keen to do a deal relatively soon in order to take advantage of the mass stakeholder pension market that will launch next April. The company is currently too small to offer stakeholder pensions and made the decision to seek an alliance in an internal review earlier this year.

The mutuals Royal London and Liverpool Victoria are thought to be interested in buying Scottish Life, and Swiss Life was reported earlier this week to be eyeing the company.

Scottish Life's advisers, Morgan Stanley Dean Witter, have been approached by a number of other interested parties following recent speculation about the future of Scottish Life, which has £10bn of assets under management.

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