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Great-West Life chairman Raymond McFeetors is reflected in a sign after the annual meeting in 2006.

Great-West Lifeco Inc. might soon strike a deal for Irish Life Group Ltd., but at least one group of shareholders isn't glad to hear the business is back up for sale.

The Winnipeg-based insurer first attracted attention when rumours surfaced it was interested in Irish Life back in 2011. Great-West, which already has a presence in the Irish marketplace through its Canada Life subsidiary, seemed like a good fit. But after the deal fell through, the Irish government stepped in to buy the business. Now that the euro zone seems to be stabilizing, the Irish insurance company could be back on the block.

But one small group of shareholders is determined the sale shouldn't happen, and has sent a letter to Irish Finance Minister Michael Noonan calling the sale "illegal." They say the proceeds from any sale should go to the original shareholders, not the government.

The disagreement surrounding the state-owned insurer dates back to the financial crisis, which is also how the business became a takeover target.

Irish Life was offered for sale in late 2011 as a way for its newly nationalized parent company, Irish Life & Permanent, to recoup some of the bailout costs stemming from the financial crisis. Great-West, which would not comment for this story, was reportedly the leading bidder among five interested groups.

But the business was then taken off the market and sold to the state for €1.3-billion ($1.68-billion). The government said at the time the crisis conditions in Europe would need to settle before a deal could be done — the market took this to mean the price was too high for Great-West. The name of Irish Life & Permanent's less profitable lending arm was renamed Permanent TSB Group Holdings PLC.

In late December of last year, reports began to surface in Irish newspapers and at Reuters that Irish Life was back up for grabs. Bloomberg reported that Irish Life chief executive officer Kevin Murphy had even put off plans to retire to fan the embers of a possible sale to Great-West, which had yet again been set alight. Irish Life is a profitable business, which makes it attractive for Great-West, which already does business in the country.

Pitotr Skoczylas, a fund manager and board member of Permanent TSB, heard these rumours and took action. He wrote a letter on Jan. 5 telling Mr. Noonan that the state's purchase of Irish Life was an illegal and undervalued acquisition.

Mr. Skoczylas is upset that the profits of the sale will be returned to the government, rather than the original shareholders, who say their stake was undervalued in the state purchase. He said the sale would amount to the government "flipping the asset" to generate returns.

"These events are even more unbelievable in the light of the fact that the whole excessive recapitalization of PTSBGH (which was the pretext for the Minister's actions) was clearly unnecessary," said John Paul McGann, another of the Permanent TSB shareholders opposed to the sale, in an e-mail.

The letter was also sent to executives at both the Canadian and Irish insurers.

Could the shareholder group slow a sale? It's unlikely, since Mr. Skoczylas and his group of shareholders have already taken their frustrations with the split of the banking and insurance businesses to the Irish High Court without success, although some ends of the court proceedings have not yet been tied up.

Fewer disruptions could be good news for Great-West. Peter Routledge, analyst at National Bank Financial, wrote in a note to clients that Irish Life's "leading market share positions in the Irish life assurance / pensions and fund management industries" would help make it an attractive long-term opportunity at a price of about €1.3-billion.

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