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Pearl confirms continued Resolution interest and sets out valuation criteria

Pearl says it is still interested in making an offer for Resolution and believes the proposed merger with Friends Provident will not create the best value for shareholders and will expose them to significant risks.

In an announcement to the stock market this morning, Pearl says the current market price for Resolution has been affected by recent press speculation about possible offers.

It says any offer Pearl may make would take into account the closing Resolution share price of 616p on July 25 following the announcement of the Friends Prov merger but before any announcement relating to Pearl’s shareholdings.

It will also take into account the “see through price” of around 575p implied by the original Resolution/Friends Prov merger terms, the price of recent comparable transactions for mostly closed life funds as well as other related values.

The statement says the Friends Prov/Resolution deal would expose shareholders to the significant risks of integration and of the synergies promised not being realised.

The statement says: “There can be no certainty that Pearl will make an offer for Resolution or as to price or timing of any such offer. This announcement does not constitute an offer for Resolution or an announcement of a firm intention to make an offer under Rule 2.5 of the Takeover Code.

“Pearl notes that Resolution has announced that it intends to post documents relating to its proposed merger with Friends in early October and that shareholders will need reasonable time to consider those documents and any alternative proposals, whether from Pearl or any other party, before deciding how to vote at the Resolution EGM. A further announcement will be made when appropriate.”

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