Friends Provident is to recommend a new acquisition deal made by Resolution to shareholders.
It previously opposed an earlier offer made by Resolution in July on the grounds that it was ‘wholly inadequate’ to compensate shareholders.
The new deal, worth around £1.87bn, offers 0.9 new Resolution shares for each Friends Provident share and includes a cash consideration of up to £500 million. In July, Resolution had offered 0.8 new Resolution shares for every Friends Provident share.
Trevor Matthews, chief executive officer at Friends Provident, said: “We are excited by the prospects for our business as the foundation for Resolution’s consolidation and restructuring strategy for the open businesses in the life and asset management sectors. Resolution is supportive of our current strategy and turnaround plan.
“Our achievements over the last 18 months in reshaping and refocusing our business have placed us well to participate in industry consolidation and leverage our efficient infrastructure.”
In its interim management report and results for the half-year ended June 30 2009 released today (11 August) Friends Provident announced its underlying profit on an European Embedded Value basis fell by 37% to £131m in the first half of 2009, compared with £211m for he same period last year. In addition, new life and pension business premiums dropped from £507m in 2008 to £319m.