Friends revives Resolution tie-up

Friends Provident, the life insurer, has said it is interested in a tie-up with buy-out company Resolution, but that it wants the deal on its terms.

It wants Friends to become the holding company of the larger group. Clive Cowdery, the founder of Resolution, would become deputy chairman.

Resolution last week said it wanted to buy Friends, but was rebuffed.

Mr Cowdery established Resolution as a business to buy under-performing financial services firms.

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

Friends response

Sir Adrian Montague, chairman of Friends Provident, said that he could "see the benefits of combining two strong executive teams with complementary skills and experience".

However this could only go ahead if Resolution was prepared to consider the "fundamental principles" of the proposal for a tie-up, with Friends in the driving seat.

If this happened, then Friends would "be happy to sit down with them and agree terms which are fair to both sets of shareholders", Sir Adrian added.

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.

RELATED INTERNET LINKS
Friends Provident
The BBC is not responsible for the content of external internet sites