Resolution has scrapped plans to sell off Friends Life via initial public offerings and will instead combine the boards of Friends Life and Resolution.
In a statement issued as part of its interim results today, Resolution also reveals chief executive John Tiner is retiring.
In August 2011, the life sector consolidation vehicle set out proposals to split Friends Life into two separately listed businesses. In March, it announced the two businesses would be completely separated by early 2014, to ensure they could be sold off separately via IPOs.
The OpenCo, or open book business, includes the UK “go to market” business units, overseas business and Sesame Bankhall Group. The HeritageCo consists of the provider’s closed book business and associated parts such as Friends Life Investments, Friends Life’s listed debt and the UK pension fund.
Resolution says: “The company will no longer seek a specific exit event and consequently the previously announced self-managed exit plan of separate IPOs of the UK ‘Go to Market’ and ‘Heritage’ business.”
Resolution also ruled out any further acquisitions.
The company will merge the governance structures of Resolution and Friends Life to create a single board. Resolution founder Clive Cowdery will join the board, which will be chaired by Resolution chairman Mike Biggs. Friends Life chairman Sir Malcolm Williamson will become deputy chairman.
Tiner is expected to leave the company once the changes have been finalised.
Cowdery says: “In terms of governance and operating we will become a traditional life company but we will continue to focus on shareholder value.
“The original governance structure was the right one for the acquisition phase of the project. Markets have become difficult and nobody is selling, and neither are we.
“Our focus is now on maximising the returns from those businesses rather than exiting on a specific date.”
Resolution’s half year results show the company recorded a 58 per cent drop in IFRS pre-tax operating profit in the six months to 30 June, from £390m in the first half of 2011 to £163m this year. The firm says this is primarily because last year’s results were inflated by £216m of “one-off benefits”.