Friends rejects Resolution move

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

Investment firm Resolution has said its takeover advances towards insurer Friends Provident have been rejected.

But Resolution, the investment vehicle of insurance tycoon Clive Cowdery, said it remained interested in making an offer for Friends.

Resolution said any offer it did put forward was likely to be mainly a share exchange, but with a partial cash element for Friends shareholders.

Friends Provident has not commented on the approach.

'Possible transactions'

"Although Resolution's proposal was not considered to be acceptable by the board of Friends Provident, Resolution received constructive feedback from Friends Provident and its advisers and is considering its response," Resolution said.

Resolution - which floated in December- is an investment firm set up by Mr Cowdery to buy under-performing financial services firms.

Resolution also said on Monday that it was "assessing possible transactions with a number of UK life assurance companies on behalf of the company, including both listed and privately-held groups, with a view to achieving consolidation".

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.