Aetna Soliciting Bids for Its Property-Casualty Division

Aetna Life & Casualty is auctioning off its property-casualty unit and is soliciting bids from several firms, sources close to the company said Monday.

The big multiline insurer has decided that it could probably get a better return by selling off its commercial and personal lines insurance segment than by continuing to struggle with high exposure and low performance from real estate holdings.

Aetna “is interested in getting the most money for its property-casualty units as it can and does not really care who puts up the money,” said one source.

“No company at this point has the inside track because so far no bid has come in that is wildly favorable,” said a source inside Aetna.

Another company source, speaking on condition of anonymity, said, “We are very much in an auction mode. We are not in formal talks with any company and it will be another two weeks or so before we get back all of the bids.”

Aetna declined comment on a Wall Street Journal report Monday that Kohlberg Kravis Roberts & Co. was preparing an offer that could top $4 billion for Aetna’s property-casualty operations.

The newspaper also said CNA Financial Corp. of Chicago and Liberty Mutual Insurance Cos. of Boston also were interested in the unit.

But a source familiar with the situation said Aetna “does not view as accurate” the report that the expected KKR proposal is chief among Aetna’s priorities. KKR is a leveraged buyout firms that has one of the largest private industrial empires in the nation.

The sale of the flagging property-casualty segment has been a topic of discussion by the top managers of Aetna since early 1994, sources said.

Aetna shares rose 62.5 cents to $74.875 on the New York Stock Exchange.