L&G Bolsters Its Defences
DAVID Prosser, the chief executive of Legal & General, has placed his board on bid alert amid concerns that the company is attracting the interest of continental European insurers eager to develop their UK life franchise.
Industry sources say L&G's appointment last week of in-vestment banks Goldman Sachs and Lazards as financial advisers, replacing Schroder Salomon Smith Barney, was prompted by the insurer's desire to shore up its defences.
According to those familiar with the situation, L&G has not been approached by an independent third party seeking to open merger discussions with the group, but the insurer's board believes such an outcome is a real near-term threat.
"To this end, it made sense for it to review its advisory capability and ensure it was content with its back-up. They are worried they might draw the unwanted attention of a predatory European insurer," one banker said.
Sources said speculation last week that Barclays may invite L&G into merger talks are well wide of the mark, even though the retail bank is known to be looking for an acquisition that would lift its market share in British savings. German insurer Allianz and Generali of Italy are both thought to be determined to expand their product manufacturing capability within the UK, which lags that of rivals such as Axa of France and ING of the Netherlands.
Axa, heavily cashed up after the disposal earlier this year of its interest in US investment boutique Donaldson, Lufkin & Jenrette to Credit Suisse, is believed to be satisfied with its existing UK life exposure though Sun Life. …