Friends Provident is to be taken over by Clive Cowdery’s Resolution Holdings after the board of FTSE 100 insurer backed the Guernsey-domiciled investment vehicle’s latest £1.86bn bid.
The deal, which is yet to be agreed by shareholders, sees Friends equity holders receiving 0.9 new Resolution shares for every one of the insurer they own.
They will also still receive Friends’ planned 1.3p dividend before the acquisition is completed and a cash sum for the first 2,500 Friends shares owned, with a value of 79.4p per share.
Resolution said this part of the offer was limited to a total sum for all shareholders combined of £500m.
Resolution said in a statement to the London Stock Exchange that it envisaged ownership of Friends would be as part of a wider Life and Asset Management Group within the company.
It intends to build the group up in the next two to four years as it takes advantage of consolidation opportunities in the life and asset management sector before offloading it, possibly through a sale or stock market listing.
Resolution said of its plans for the group: "[Resolution] does not expect to be the long term owner of the Life and Asset Management Group. It expects its current consolidation and restructuring project to last between two to four years. Upon completion of the project, Resolution expects to return value for enlarged group shareholders."
Cowdery, who made a fortune in insurance after beginning life as a salesman, floated Resolution on the Guernsey Stock Exchange last year, raising £600m. He had earlier sold Resolution’s book of business – primarily made up of closed life insurance funds – to Pearl Group but retained the rights to the Resolution name.
Any consequences of the deal for Friends Provident International (FPI) and Lombard, the Isle of Man and Luxembourg domiciled subsidiaries of Friends Provident Group, were not immediately known.
An aborted bid to sell Lombard was made last year, as well as another subsidiary, F&C Asset Management.
After buyers could not be found for either, a demerger was completed with the asset manager, while Lombard was retained.
In recent business plans, FPI, which has significant business interests in Asia and the Middle East, has been singled out as being seen as a key driver of new business growth for the group.
