Swiss Life no longer bidding for Lombard: source

LONDON (Reuters) - Swiss Life (SLHN.VX) is no longer considering a bid for Lombard, the high-end insurance unit of Britain's Friends Provident FP.L, a source familiar with the matter said on Thursday.

Shares in Swiss Life fell last week on the back of a report that the insurer's chances of winning the bid race for Lombard were good, raising concerns it could pay too much.

"They are no longer in there," a source familiar with the matter told Reuters.

Friends Provident declined to comment, as did Swiss Life.

Sources familiar with the matter told Reuters in May that the Swiss insurer was the only trade buyer considering a bid, so its departure would leave only buyout firms.

The Sunday Express said Swiss Life was "understood to be the frontrunner" to land Friends Provident's wealth management business Lombard, after offering 600 million pounds ($1.19 billion) for the unit.

The offer fell short of the 700 million pounds Friends was hoping for, but Swiss Life has edged ahead of private equity firms CVC and Hellman & Friedman due to problems buyout firms are having raising money, the newspaper said.

Some analysts have valued Lombard at more than 700 million pounds, but bankers have been skeptical of Friends' ability to command a hefty premium in current market conditions.