CVC Said to Consider Buying Stake in Dutch-Owned InsurersCorina Ruhe, Kiel Porter and Maud van Gaal
CVC Capital Partners Ltd. is exploring a bid for stakes in ASR Nederland NV and Reaal NV, according to two people with knowledge of the matter, reviving an attempt to invest in state-owned Dutch financial companies.
The U.K. private-equity firm is considering buying a stake in ASR, which has been government-owned since 2008, said the people, who asked not to be identified because the talks are private and no final decision has been made. ASR, among the nation’s five biggest life insurers, and CVC would then jointly bid for Reaal, the insurance arm of the collapsed bank SNS Reaal NV, they said.
Other private-equity companies are considering offers, one of the people said. The Netherlands dismissed London-based CVC’s effort to gain a stake in the two companies last year, saying the state would end up with an unfair share of the risks. Finance Minister Jeroen Dijsselbloem told lawmakers in The Hague today “private-equity parties can contribute to a solid future” for the companies and won’t be excluded from the sale of Reaal and ASR, responding to concerns they will load the insurers with debt.
ASR will “formally engage in talks with several parties that could participate in a bid” after the finance minister’s plans are debated in Parliament, Daan Wentholt, a spokesman for ASR, said in an e-mail, declining to identify the potential buyers. Jeroen de Graaf, a spokesman for SNS Reaal, said it was premature to comment.
Spokesmen for CVC and NL Financial Investments, the agency managing the government’s stake in nationalized financial firms, declined to comment.
CVC made its original offer to the Netherlands as the nation sought to avoid a bailout of SNS Reaal, which was stung by real estate losses. Dijsselbloem ultimately took full control of SNS Reaal in February 2013, wiping out shareholders and some bondholders.
Dijsselbloem said this month that he plans an auction for Reaal to satisfy European regulators seeking a speedy disposal. ASR will be allowed to participate if it can attract capital to fund an offer for Reaal, though it will only be permitted to issue equity and dilute the state’s shares if a bid is successful, the minister said.
A majority of Parliament indicated they support the plans, Dijsselbloem said today, adding he would brief lawmakers again if ASR will play a part in the takeover of Reaal.
CVC valued ASR at 1.7 billion euros ($2.3 billion) in talks with the Dutch government last year, according to documents posted on the government’s website. Lazard, the financial adviser to NLFI, valued the company at 2.15 billion euros to 2.3 billion euros, the documents showed.
The market for insurance companies remains “difficult,” and the value of individual insurers is under pressure, though financial stability in the industry has improved, Dijsselbloem said on June 6.
The Netherlands, owner of two of its biggest banks and insurers, is seeking to restore competition in the finance industry while recouping as much as possible of taxpayers’ money spent on bailouts. The value of insurance companies is depressed due to falling life product sales, low interest rates, stricter capital demands by regulators and a legacy of investment-linked life insurance products that may lead to claims, the Dutch central bank said in a report in April.
ING Groep NV, the largest Dutch financial-services company, is offering shares in its insurance arm in an initial public offering. The shares are due to start trading on July 2.
Dijsselbloem said today that while ASR, based in the Dutch city of Utrecht, is “ready,” the disposal of Reaal will get priority and that the share sale for ING’s NN Group NV will also be taken into account.