MILAN/LONDON (Reuters) - Generali (GASI.MI) has received non-binding offers for Swiss-based private bank BSI and U.S. reinsurance business, chief executive Mario Greco said, as the Italian insurer seeks to strengthen its capital to meet new industry rules.
Greco, who took the helm in August and aims to raise 4 billion euros ($5.3 billion) from asset sales, said on Friday any sale could take some months.
“I am not sure that we will have closed all the sales by the end of the first quarter. We are talking of a few months,” Greco told reporters.
The reinsurance business in the United States is likely to attract a lot of interest from industry rivals, while BSI may draw relatively fewer bidders who will be able to play hardball on price.
Potential suitors for Generali U.S., which analysts have valued at $500 million, include Munich Re (MUVGn.DE), Swiss Re SRENH.VX, Zurich ZURN.VX, Scor (SCOR.PA), Hannover Re (HNRGn.DE), RGA (RGA.N) and Bermuda based hedge funds and reinsurers.
Europe’s third-largest insurer, bought BSI just before the financial crisis and has been trying to sell it for more than two years. But Generali had until now failed to attract significant interest, several banking sources have told Reuters.
Price has been the main sticking point since potential buyers believe BSI is worth less than its book value of more than 2 billion euros, two people working for possible suitors said.
But the new owner of the Lugano-based bank has scope to make BSI more profitable as it has high costs and has never been restructured by Generali’s former management, one banker said.
Brazilian private bank Safra, which took control of Swiss bank Sarasin last year, is believed to have made an offer for BSI, two people familiar with the talks said.
Safra was not immediately available to comment.
Japan’s Mizuho MZFGB.UL, Royal Bank of Canada (RY.TO), which already has a wealth management business in Geneva, have both looked at BSI, they said, but they also said these two were not seen as potential bidders.
Julius Baer BAER.VX is not believed to have made an offer for BSI after it bought Bank of America’s (BAC.N) private bank business outside the United States last year, the people said.
Private equity firms which have invested in financial businesses in the past such as Carlyle (CG.O), KKR (KKR.N), Apollo APOLO.UL and Apax, could be interested in BSI but would need to team up with an industry player to get regulatory approval, bankers said.
Italian newspaper Il Sole24 said earlier on Friday that Julius Baer, RBC, private equity firm Apax and an Asian investor had made offer for BSI.
Il Sole24 also tipped Berkshire Hathaway, ACE ACE.N, Swiss Re, Munich Re and Hannover Re as possible suitors for the U.S. business.
Writing by Lisa Jucca; Editing by Greg Mahlich and Jane Merriman