Barclays plays down Friends 'move'

Is Barclays preparing a sequel to Woolwich?

Barclays Bank has played down a report that it has approached mutual life assurer Friends Provident about a £4bn takeover.

A spokeswoman for the bank said the report in the Observer newspaper appeared "very speculative" and was not the sort of thing which they would comment on.

Barclays is in the process of buying mortgage lender Woolwich for £5.4bn

The newspaper quoted 'City sources' as saying chief executive Matt Barrett wanted to boost bank's life insurance and pensions operations.

Friends Provident is planning to demutualise and float its shares in London next year.

The newspaper report also suggests that Barclays was interested in acquiring Equitable Life, which put itself up for sale last month and is thought to be worth up to £5bn.

Rumour and speculation

Barclays would join a list of bidders which reportedly includes General Electric's GE Capital and mortgage bank Abbey National.

Friends Provident managers announced in May that it was to demutualise, with 1.7 million members set to qualify for a windfall.

Friends Provident manages funds worth £38bn, and is said to have more than £5.5bn ($8.49bn) in reserves.

The board of Friends Provident said it believed that a stock market listing would help it expand its business.

A spokesman for Friends Provident was reported in the Observer as describing the talk of an approach from Barclays as "all rumour and speculation".