In a trading statement issued today, the Resolution board set out a cash offer for the first 2,500 Friends Provident shares with Resolution shares issued for the remaining stock.
The possible offer would enable Friends Prov shareholders to elect to take Resolution shares instead of all or part of the cash component of the offer, at the applicable exchange ratio per Friends Prov share.
The cash component of the offer is expected to allow the vast majority of Friends Prov’s retail shareholders to exit in cash in full, if they so choose.
Resolution also says it will pay Friends Prov shareholders a 2009 dividend which would give them the same dividend income they would have received in the absence of this transaction.
The two firms are meeting today to “find a way forward that is mutually acceptable”, says the statement.
On Friday, Friends Prov set out proposals for the combination of the groups which would see Friends Prov become the holding company of the new entity, to be named Friends Provident Holdings (UK) Limited.
Under Resolution’s plans the Friends Provident Board would become the board of Resolution’s UK holding company, to be named Friends Provident Holdings.
Friends Prov Holding would be the vehicle used to acquire other insurers with Resolution intends to re-list as an enlarged group by 2012 on completion of the group’s consolidation strategy.
Friends Provident Holdings would be a wholly owned subsidiary of Resolution. The Resolution Board is chaired by Mike Biggs. Resolution says the Friends Provident Holdings Board will be comprised of a majority of independent non-executive directors, including Friends Provident’s existing chairman.
Resolution would invite all of the existing Friends Provident non-executive directors to join this board, supplemented, over time, by additional non-executive directors from the Boards of subsequently acquired companies, as well as the chief executive and chief financial officer of Friends Pov Holdings
plus Clive Cowdery and John Tiner.