Resolution says it is prepared to change the terms of its agreed merger with Friends Provident to drive through the deal and fend off any threats from Pearl Assurance.
Chairman Clive Cowdery told the stockmarket that Resolution will switch the terms of the deal from a merger to a takeover, which would reduce the number of shareholders needed to agree the proposals from 75 to 50 per cent.
Pearl has built up a 16 per cent stake in Resolution and its head Hugh Osmond has said he does not feel a tieup between Resolution and Friends provides value to Resolution shareholders.
In a further threat to the deal, Deutsche Bank has built up a 6 per cent stake in Resolution, making it the group’s second-biggest shareholder behind Pearl. Deutsche this week signalled its intention to be a major player in the closed life insurance industry by buying Abbey Life from Lloyds TSB in a £1bn deal.
Old Mutual has been touted as another potential suitor for Friends.
Resolution has been keen to underline the benefits of its agreed all-paper merger with Friends in a move that would create a £8.3bn business under the Friends Financial banner. The arrangement would see Resolution funding new business acquisition costs for Friends and bring an estimated £100m annual cost savings after a £120m integration cost.
Resolution Asset Management would be merged into F&C Management, which is 52 per cent owned by Friends Provident, with the business retaining the F&C branding.
Scottish Provident would be retained and run alongside Friends’ protection business.
Friends Provident life and pensions chief executive Ben Gunn has been reassuring IFAs that service standards will not drop if the deal goes through.
Gunn says: “It is a complete mistake to think that this will do anything but strengthen the business with IFAs. This is a much larger group – twice as big and clearly financially stronger.”