Resolution 'in bid for Friends'

Friends Provident reported a 40% drop in first-quarter sales

Insurance tycoon Clive Cowdery has made a takeover approach for Friends Provident, according to reports.

Mr Cowdery is believed to have made the offer through his investment vehicle Resolution Ltd, Sunday newspapers said.

Friends is expected to reject the offer. Both Resolution and Friends Provident declined to comment.

Mr Cowdery's first insurance company Resolution Plc agreed to merge with Friends in 2007, but the deal lapsed when Pearl Group took over Resolution.

Shares in British insurers have fallen sharply in the last year because of fears that falling markets could hit their capital reserves.

Friends Provident shares closed at 60.4p on Friday. In September they were worth 104p.

In April, the insurer reported a 40% drop in first-quarter sales.

The proposal is believed to have been made in a letter from Mr Cowdery to Friends chairman Sir Adrian Montague.

Friends is likely to reject the approach on price grounds, according to reports.

Analysts have been waiting for Resolution to pursue its first deal since it was cleared following an investigation by the Financial Services Authority (FSA).

The FSA had been looking into corporate governance at Resolution.