A court sanctioned scheme of arrangement will now take place between Friends Provident and its shareholders, while the same for Resolution has been scrapped with the consent of the Panel Executive.
This means that the merger is now conditional upon the approval of a 50 per cent of Resolution shareholders at the group’s Extraordinary General meeting and 75 per cent of the shareholders at Friends Provident. A role reversal of the prior arrangement.
Pearl has built up a 16 per cent stake in Resolution and its head Hugh Osmond has said he does not feel a tieup between Resolution and Friends provides value to Resolution shareholders. Osmond is also believed to be looking for a number of third-party groups who can assist in a rival takeover of the group.
Both boards have also announced confirmation that the proposed merger would result in some £100m in annualised pre-tax savings and synergies by 2010.
Resolution’s board has also announced the proposed merger of its two life divisions by November 2007 as well raising its estimate of financial synegies from £150m to £250m from the planned fund merger in 2008.
Resolution has also acquired the Scottish Provident’s broker consultant business as of 28 September 2007 from Abbey for Intermediaries. The acquisition of the 65-strong broker firm gives Resolution the ability to move all cash investments of the former Abbey Life companies to Resolution AM over the next 12 months.
Resolution group chief executive Mike Biggs says: “The actions we have announced today, along with the restructuring of the merger, demonstrate our commitment to the merger and reinforce the strong growth and value we expect to create from Friends Financial.”