While it is not yet clear which of the competing parties will win the auction for General Electric's UK life business, it does seem as though they will be buying at a discounted value.
GE had forecast that its British life insurance business would fetch around GBP380 million. However, according to a report from the Times newspaper, inside sources suggest that the actual sale price will fall around GBP40 million short of GE’s expectations.
While a number of private equity companies and smaller annuity providers remain on the edge of the picture, Bermuda-based insurer XL Re is believed to have withdrawn from the auction, leaving GE reliant on the appetites of just two remaining bidders, Swiss Re and Deutsche Bank.
GE has not commented regarding the speculated shortfall on its valuation of its UK life operation, which, if realized, would come as a major disappointment to the diversified US firm.