Friends Provident has rejected a £3.5bn offer from private equity group JC Flowers.
JC Flowers bid last Thursday to buy the FTSE 100 listed company for 150p a share, but the board of Friends Provident says it has declined the bid.
The proposed price is well below the 175p JC Flowers was said to be considering offering in January.
In a statement issued today Friends Provident says: “Its proposal significantly undervalues Friends Provident plc and its prospects and does not represent a basis for discussion.’
The Friends Provident board says it remains focused on the implementation of its strategic review announced earlier this year. It says it will further update shareholders on progress during its 2008 interim results announcement.
Under the proposed offer from JC Flowers, which already owns around 2 per cent of shares in Friends Provident, the offer price would have been reduced should it pay the 2007 final dividend of 5.3 per cent a share.
Friends Provident’s share price has fallen dramatically since last year’s aborted merger attempt with fund management firm Resolution. Profits at the Hampshire-based company fell 96 per cent in 2007 to £16 million.
The firm’s January strategic review sought to realign the business on pensions and protection with the planned sell off of asset management subsidiary F&C. It said it expected to shed around 600 jobs as a result of the review.