Then There Were None… Prudential Pulls Out of Equitable Talks

The U.K.’s Prudential has pulled out of the bidding for Britain’s oldest mutual insurer, Equitable Life, leaving no one left in the running to acquire it, and raising questions about the future of the company.

When Equitable first put itself on the market last July, following an adverse court ruling that it must continue to honor guaranteed annuity policy payments, there were at least 15 companies who expressed interest in acquiring it, but one by one they’ve fallen by the wayside.

The uncertain amount of Equitable’s potential liabilities is the principal reason buyers have backed away. After the court decision around £1.5 billion ($2.18 billion) was the figure given, but recent estimates now put the debt load a buyer would have to assume at more like £3 to £5 billion ($4.35 to $7.25 billion).

This uncertainty apparently proved too much even for Prudential, which had always been considered the leading candidate.

Equitable announced that it would no longer accept new business, but will continue to accept premiums and pay benefits under existing policies. No one in London quite knows what will happen next.