J.C. Flowers On Short List For Irish Life

Banking and finance buyout firm J.C. Flowers is one of a shortlist of five bidders for the insurance arm of troubled lender Irish Life and Permanent , a source told sister news service Reuters.

J.C. Flowers will make a joint bid with private equity firm Apollo Global Management for Irish Life insurance, the source said. Canada Life Ireland and U.S. insurers Unum and Delphi are also bidding for the firm, the source said. Final bids for Irish Life are due by October, the source said.

The Irish government is selling the cash-rich life insurance arm, with an embedded value of around 1.6 billion euros to help fill a capital shortfall near €4 billion ($5.7 billion) in Irish Life and Permanent. It has injected €2.7 billion in state funds into since the company’s effective nationalization.

A spokesman for Irish Life said it would not comment on the sale. J.C. Flowers declined to comment.

In a related development, Irish Life & Permanent’s banking unit has agreed a deal to acquire the €650 million-plus Irish deposit book of UK lender Northern Rock as it seeks to improve its stretched funding position and ensure a standalone future for the bank.

The Northern Rock deal comes six months after IL&P’s bank, Permanent tsb, acquired some €3.6 billion in deposits from Irish Nationwide Building Society in a bid to lower its loan-to-deposit ratio, which is the highest in the industry.

Irish Life & Permanent’s banking arm is on track to turn a profit by 2014 according to a restructuring plan sent to the European Commission, the Irish Independent reported, quoting unnamed sources.

(Conor Humphries is a Reuters correspondent in Dublin; additional reporting by Carmel Crimmins and Padraic Halpin.)