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Low float price may spark bids for Friends

Rival firms could be waiting in the wings to swoop on Friends Provident following City sentiment that its float price will be lower than expected.

Industry sources say several companies are waiting to see the life office&#39s share price on listing before looking at making a bid for the company.

Friends&#39 advisers Merrill Lynch set the flotation share price at 210p to 270p. But the pre-float price in the City is being valued towards the lower end of this range. The price will be announced on Friday, with the listing set for July 9.

Friends says it has had no takeover approaches but Money Marketing understands a number of groups approached Friends and were turned away.

Companies without a significant presence in the UK, such as Allianz, are likely to be interested because Friends would give them access to most product areas.

Waiting for Friends to float before moving in would mean the bidder avoids the complicated demutualisation process.

Friends spokeswoman Di Skidmore says: “There are no people swooping around us and we have not had any take-over approaches.”

Informed Choice managing director Nick Bamford says: “Consolidation of providers is a fact of life. I would have thought anyone receiving Friends&#39 shares would be pleased to know that people want to buy it.”

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