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Britannic seeks merger to compete on bigger scale

Britannic Group is seeking a buyer or a merger with a similarly sized financial services group to help it to compete with its heavier-hitting rivals in the UK.

Chairman Harold Cottam says the rapidly changing markets in which Britannic operates have forced it to pursue a merger which will give it the scale to exploit business opportunities to the full.

The news comes as Britannic announced that its operating profits fell to £101.6m last year from £174.5m the previous year. The fund management arm reported a dramatic after-tax loss of £263.9m while a £43.8m exceptional write-off at mortgage arm Britannic Money also hit the bottom line. The group says the lender is unlikely to turn a profit until 2003 at the earliest.

Although much work has gone into restructuring, with Britannic Assur-ance closing its direct salesforce last year to concentrate on the IFA market, only Britannic Retirement Solutions is performing well.

Britannic has also failed to appoint a replacement for group chief executive Danny O&#39Neil, who quit in January after only two months. Cottam currently performs the role.

He says: “The markets in which we operate are changing rapidly and we believe our businesses need greater scale. Consequently, we are alert to appropriate opportunities to achieve this for the group.”

A rival provider says: “The management appears to have panicked. This company is not poor – why has it put itself up for sale now when markets are down? Most sellers inform the market that they would need a substantial premium before they will consider offers.”

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