Troubled Equitable Life Rejects GE Capital Offer

Equitable Life, the troubled British mutual insurer, Thursday rejected a $2.17-billion offer from U.S. financial services group GE Capital, saying its terms were inferior to a sale agreed with British mortgage bank Halifax this week.

Equitable, forced to close to new business in December, said in a statement that although GE Capital’s figure was higher than Halifax’s, overall it was not as attractive.

“The significant degree of conditionality in the proposal, together with a number of adverse features, means that the board regards it overall as significantly inferior,” it said.

GE Capital, the financial services arm of General Electric Co., had made a higher counteroffer for Equitable on Wednesday. That came only days after Equitable had agreed to sell parts of its business to Britain’s largest mortgage bank Halifax for $1.44 billion.

The Halifax deal promised to bring some relief to thousands of pension policy holders in Equitable’s ailing fund.

An Equitable spokesman said at the time the mutual considered the deal to be final.

But on Wednesday GE came back with its higher offer, having earlier failed to win over Equitable’s management with a proposal worth $1.66 billion.

Equitable said GE’s offer was highly conditional, with payment subject to sales force retention targets, future levels of funds under management and redirection of future policyholder premiums.

Equitable Chief Executive Chris Headdon said GE had been involved in the Equitable sale process for the last six months. “Now at the thirteenth hour, it puts forward a break-up proposal that is highly conditional, contains elements that will work against the interests of policyholders and which has even yet to be approved by its board in the United States.”

GE Capital was not immediately available to comment.

GE Capital is the largest private label credit card administrator in Britain and is mainly interested in Equitable’s administration and fund management units.