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Friends Provident calls off F&C sale

Friends Provident has announced that is has pulled out of discussions over the potential sale of F&C Asset Management.

The move comes after both Friends Provident, which has a 52 per cent stake in the asset manager, and F&C themselves, held discussions with a number of parties during the offer period, which was announced in January 2008.

Friends Provident has now announced that it intends to divest its holding to shareholders, with board members Sir Adrian Montague and Trevor Matthews, Friends Provident’s nominated shareholder representatives on the F&C board, retiring from the board at its conclusion, which is expected in mid-2009.

The announcement brings an end to over a year of uncertainty surrounding the asset manager, which has also announced its preliminary results this morning.

The firm’s assets under management fell by 4.8 per cent, from £103.6bn in 2007 to £98.6bn at the end of 2008 and an underlying profit after tax of £38.3, down 24 per cent from £50.2m in 2007.

Net revenues fell from £264.5m to £229.9m, while F&C has also announced that operating costs were reduced by £12.9m in 2008.

Dividend is to be unchanged for the year at 4p per share, with 6p for the full year.

F&C Asset Management chief executive Alain Grisay says: “‘These are without doubt challenging times for asset managers as markets remain volatile and the economic outlook continues to deteriorate. However, we are pleased to report that F&C continues to demonstrate the strength of its diversified business model with resilient assets under management and revenues, improving fee margins and a proactive approach to cost management.

“While we expect the market outlook to remain tough during 2009, with the uncertainty over our ownership coming to an end we are confident about the future. Investment performance remains competitive; we have strengthened our infrastructure and have enhanced our distribution capabilities. The result is a platform that has the capacity to take on significant assets.

“Having acquired REIT Asset Management in 2008, we will continue to seek opportunities to enhance our business through acquisitions that will maximise value where the execution-risk is acceptable.”

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