Old Mutual unit sale to Harbinger takes longer

LONDON/BOSTON (BestGrowthStock) – The sale of Old Mutual’s U.S. life insurance arm to hedge fund manager Philip Falcone will take longer than planned, the company said on Wednesday.

The deal is now expected to be completed in the first quarter of 2011 after the Anglo-South African financial conglomerate initially said it would be completed in the last quarter of 2010.

Falcone’s roughly $7 billion Harbinger Capital Partners agreed to buy the unit for $350 million in August.

Old Mutual (OML.L: ) said it and Harbinger are still holding talks with U.S. state regulators to obtain approvals.

“We expect these discussions will take some weeks to conclude and, as a result, closing is now expected during the first quarter of 2011,” the company said in a release.

Old Mutual said the deal’s price tag had not changed.

The company said the delay was designed to give Harbinger more time to arrange financing for the risk on some of the liabilities of the unit.

Falcone, whose bet against the housing market in 2007 helped his fund’s assets swell to $26 billion, recently turned his attentions to wireless broadband technology.

At the same time he is reshaping the Harbinger Group Inc(HRG.N: ), a publicly traded company where his fund is already the majority owner, as a vehicle to make long-term acquisitions.

For a few weeks in October, Falcone intended to have the Harbinger Group, which has little over $100 million in cash on its balance sheet, purchase the Old Mutual unit, a regulatory filing showed. But those plans were scuttled in late October, according to another regulatory filing.

This summer, investment bank UBS arranged a $400 million loan package for Harbinger that was backed by billions of dollars of the hedge funds’ assets.

Falcone did not respond to questions about the deal.

Old Mutual shares closed down 0.17 percent in London.

(Reporting by Sudip Kar-Gupta and Svea Herbst-Bayliss; editing by Rosalba O’Brien and Andre Grenon)

Old Mutual unit sale to Harbinger takes longer