LONDON: Phoenix Group Holdings, Britain’s largest owner of life assurance funds closed to new customers, is in talks to buy Guardian Financial Services, it said, although analysts say uncertainty over new capital requirements for European insurers could delay any agreement.

The move comes as life insurers in the UK are also having to adapt to an overhaul of taxation rules which effectively give retirees more control over their pension pots, no longer compelling them to buy annuities on retirement.

Phoenix said it was evaluating a bid for Guardian Financial, currently owned by private equity firm Cinven , as one of a number of further “consolidation opportunities” in the UK closed life sector.

It has in the past paid around 70-80 percent of embedded value (EV) for acquisitions, analysts said, implying a price tag of between 1.89 billion pounds and 2.16 billion pounds for Guardian Financial, which last reported an EV of 2.7 billion pounds, similar to that of Phoenix.

EV is a standard industry measure that includes the net present value of estimated future profits from an insurance portfolio and the net asset value attributable to shareholders.

If finalized, this could be the third big deal this year in the UK life insurance market after Aviva’s acquisition of Friends Life and the merger of Just Retirement and Partnership Assurance.

“We view Guardian Financial as well managed and would represent a transformational deal for Phoenix ... the issue is whether Cinven would accept the level of discount implied in the current rating of Phoenix,” Shore Capital analysts said in a client note.