Author: By Russell Lynch, Press Association
Friends – which traces its history back to 1832 – agreed a deal after
Resolution’s fourth approach since early July.
The all-share deal values Friends at 79.4p a share but there will be a cash
alternative for the first 2,500 shares held by investors – benefiting around
700,000 smaller shareholders in the business.
Resolution is an investment firm set up by insurance tycoon Clive Cowdery to
buy up under-performing financial services firms. Former Financial Services
Authority boss John Tiner is chief executive.
The company intends to follow up the Friends deal with further acquisitions
among insurance and asset management firms.
Friends chairman Sir Adrian Montague said: “The transaction offers
shareholders the choice of an attractive premium on exit or the opportunity
to be part of Resolution’s first financial services restructuring project.”
The insurer had previously rebuffed its suitor on price grounds as well as
concerns over corporate governance at the Guernsey-based firm.
Friends said parts of Resolution’s structure and governance were “totally
inappropriate in a public company context” and against current best practice.
But talks were reopened two weeks ago, reportedly after pressure from major
Friends shareholders keen to see a deal.
On completion of the takeover, the Friends Provident name will be used for the
holding company of Resolution’s UK business, as well as any subsequent stock
Friends chief executive Trevor Matthews and financial director Evelyn Bourke
will continue in their current roles.
The news came as Friends posted a worse-than-expected 38 per cent fall in
underlying operating profits to £131 million in results for the first half
of the year.
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