GE Capital made it clear that the fight for Britain’s Equitable Life wasn’t over yet, when it came back to the table with an improved offer for the troubled insurer. While details of the new bid weren’t revealed, GE had already proposed a total package of £1.2 billion ($1.75 billion) in an attempt wrest control of Equitable from Halifax, the U.K. mortgage lender, whose £1 billion ($1.46) offer was hastily accepted by company directors on Monday.
GE’s prior bid was rejected by the board on the basis that it involved more loans than equity financing, even though it contained plans to reopen the insurer’s general fund for new business, and to make Equitable GE’s European business center. The board indicated that the deal with Halifax was “irrevocable,” but GE has met with Financial Service Authorities, and is reportedly exploring ways to void the agreement.
The new bid also focuses further attention on Equitable’s overall solvency. Moody’s Investors Service reported that there was still “significant uncertainty,” unless policy holders approve an overall plan to cap the insurer’s guaranteed annuity liabilities. Halifax has made such approval a condition for the second stage of its purchase of Equitable’s assets.
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