Aegon in exclusive talks to sell Guardian Life Insurance
Sources say an announcement is likely "within weeks" after Cinven entered a period of exclusivity with Aegon and Goldman Sachs, which is managing the auction.
It was revealed last month that Lancashire-based Guardian would be put up for sale by Aegon as it looks to slash 80m of costs by the end of the year from its UK operation, based in Edinburgh.
Apollo and Swiss Reinsurance were also believed to have been interested in the asset - which has a 300 million portfolio of life assurance policies - but Cinven has been given a couple of weeks to thrash out a potential deal.
Insurance acquisitions vehicle Resolution, which earlier this year said there were no more appropriate takeover targets in the UK market, also considered the deal, according to reports.
Cinven's current investments range from hospital operator Spire Healthcare, to European clothing chain Camaeu.
If an agreement can be reached, analysts believe the deal is likely to be the first of several private equity buy-outs in the sector as groups eye both general insurance and so-called "zombie" life funds, which are closed to new business.
Zombie funds in particular are still believed to offer attractive consolidation prospects.
Guardian, a 190-year-old brand with 500,000 customers, stopped taking on new policyholders ten years ago.
The market expects any forthcoming deal with Cinven to be valued at more than 250m.
Both Cinven and Aegon yesterday declined to comment on the exclusive talks but an Aegon spokeswoman stressed that the Dutch firm remains committed to doing business in the UK.
She said: "We continue to review our portfolio of businesses on a regular basis, consistent with our strategic objectives in our core businesses of life and protection, pension/retirement and asset management.
"Aegon remains committed to the UK and to maximizing the opportunities of its chosen markets."
Aegon bought Guardian in 1999. In June last year the firm announced it was refocusing its UK operation to concentrate on the "at retirement" and workplace savings markets.
Aegon UK chief executive Adrian Grace, who took over from Otto Thoresen in March, has also been charged with reducing costs by 25 per cent - a strategy that has resulted in hundreds of job losses in the Scottish capital.
In a separate announcement yesterday, Aegon revealed that Simon Skinner, who only four months ago was promoted to the role of chief operating officer for life and pensions at the UK business, will head up Aegon's operation in Ireland.
Grace said: "Aegon Ireland is well-positioned to capitalise on the substantial growth opportunities for variable annuities, both in the UK and across Europe."I've worked closely with Simon in the two years since he joined Aegon and I'm confident he is the right person to lead Aegon Ireland through the next phase of its development."
Skinner's replacement is yet to be announced.