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Resolution preparing a new bid for Friends and an offer for Pru

Resolution is expected to make a revised bid for Friends Provident after the firm rejected an initial offer and is lining up bids for a number of other insurers.

Money Marketing understands Resolution may be considering an offer for Prudential, after an initial proposal was rejected earlier this year, plus possible bids for other insurers.

On Monday, Friends rejected Resolution’s proposal of 0.8 new Resolution shares for every Friends Provident share, calling the offer “wholly inadequate”.

This would have led to Friends’ shareholders holding around 74 per cent of Resolution. Friends says the complexity of the proposed board and management structure would limit the remit of its management team.

Resolution Limited, which would acquire Friends, is registered in Guernsey while Resolution Operations is the secondary company charged with lining up possible acquisitions.

The management team of Resolution Operations is founder Clive Cowdery, chief executive John Tiner, chief financial officer Jim Newman, head of mergers and acquisitions Ian Maidens and head of operations Brendan Meehan. This team will share a 0.5 per cent annual fee on the value of Resolution Limited and 10 per cent of any increase in value of the firms acquired.

A Resolution spokesman says it is too early to detail what plans Resolution has for Friends-owned network Sesame. Chief executive Trevor Matthews is expected to remain with Friends if a deal took place. Resolution was forced to halt acquisition plans in March when the FSA launched an investigation into the company and a number of its directors. In May the FSA announced it would not be taking any disciplinary action.

Master Adviser IFA Roy McLoughlin says: “I feel it is a sad day if a company with such a long history as Friends Provident loses its independence. I worry the business might be broken up and some products may disappear.”

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