Page last updated at 21:54 GMT, Monday, 20 July 2009 22:54 UK

Friends rejects Resolution again

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

Insurer Friends Provident has rejected a revised takeover offer from investor Resolution, dismissing aspects of the bid as "totally inappropriate".

It said the terms of the deal would benefit Resolution and not the shareholders of Friends.

The revised offer included a cash element and an indication that it would match this year's dividend income.

Last week, Friends knocked back Resolution's advances, but said it was open to the idea of joining forces.

'Fair terms'

It has still not closed the door on a deal with the investment firm.

"Friends Provident continues to see advantages in the consolidation of the UK life industry, but also believes that a consolidation of Friends Provident and Resolution can only be agreed on terms that are fair to both sets of shareholders and with a structure that complies with corporate best governance practice," it said.

Resolution said it was disappointed and "continues to consider its position".

Resolution - which floated in December - is the investment vehicle set up by insurance tycoon Clive Cowdery to buy under-performing financial services firms.

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.

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SEE ALSO
Friends Provident tie up still on
17 Jul 09 |  Scotland
Friends rejects Resolution move
13 Jul 09 |  Business
Resolution 'in bid for Friends'
12 Jul 09 |  Business
Watchdog probes 5bn insurer sale
09 Mar 09 |  Glasgow, Lanarkshire and West
Pearl buys Resolution for 4.98bn
16 Nov 07 |  Business
Resolution promises 2bn payout
24 Oct 07 |  Business

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