Further talks on Resolution offer

Source: Stock Market Digital

Date :26/10/2007 09:42:22

Standard Life is in advanced talks with closed life insurer Resolution over a possible recommended £4.9 billion offer for the group.

The news comes as a further potential blow to Friends Provident's hopes of succeeding with plans to merge with Resolution.

The "zombie" fund specialist, run by chairman Clive Cowdery, said earlier in the day that it had received a cash and shares takeover approach from Standard Life.

Sale

Edinburgh-based Standard Life confirmed it was planning on selling Resolution assets under the potential offer, with aims to offload a life division and Resolution Management Services to Swiss Re for cash.

Bidders had until 5pm on Thursday to make a move for Resolution which has already agreed an £8.5 billion tie-up to create Friends Financial.

Resolution, which last week rebuffed an approach worth £4.8 billion from Pearl Assurance, is considering the Standard offer and has asked the Takeover Panel for a 24-hour extension to its deadline.

Standard Life's decision to approach Resolution drew a lacklustre response from its own investors. The company's shares fell around 2%, knocking the value of the conditional offer for Resolution.

Payout

Resolution and Friends Provident turned up the heat on other potential suitors yesterday by revealing plans to return up to £2 billion to shareholders of the enlarged company over the next two years.

Friends Provident and Resolution shareholders are due to vote on the £8.5 billion merger on November 5.

The combination of Resolution and Friends is expected to generate at least £100 million of annual cost savings, although the firms have denied this will lead to major job losses.

October 26, 2007

Related Links

Resolution

Standard Life

Friends Provident