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NU and Friends buy 20% of Tenet

Norwich Union and Friends Provident are both paying £9.5m to take 10 per cent stakes in IFA the Tenet Group.

Neither NU nor Friends has ruled out a possible future multi-tie agreement but said, while they had management responsibilities with the IFA, they would not be involved in the day-to-day running of the business or have seats on the board. The stakes ensure neither falls foul of the better than best rules.

Tenet Group chief executive Simon Hudson says he approached providers at the start of last year and denied the deal was connected with CP121. The transaction releases £4m in cash to the IFA group.

The parties declined to give a direct breakdown of the amount invested in terms of shares and loan capital, as Tenet, which owns networks M&E and Interdependence, is not a listed company. But Hudson said there were no options to convert the loans into shares.

Hudson led a £17m MBO in April 2000, borrowing £7.25m from venture capitalists, which has now been replaced by loans from the two providers.

Friends Provident director of corporate development Rocco Seppe says he would consider taking further minority stakes in IFAs with like-minded partners.

Norwich Union director of IFA development David Barral says: “We are investing in distribution, not seeking to control it. The options could include multi-tying.”

Pensions & Investment Management principal and M&E member Phil Moore says: “Hopefully, this will help the network prosper. We might decide that we want to multi-tie anyway.”

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