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Resolution “welcomes” Friends Prov proposal

Resolution says it welcomes Friends Provident’s statement, released earlier today, setting out proposals for the combination of the groups which would see Friends Prov become the holding company of the new entity.

Friend Provident is proposing a unified board and management structure comprising a combination of Resolution and Friends Provident executives and non-executives.

It proposes Resolution chairman Mike Biggs becomes chairman of the enlarged group and Clive Cowdery becomes executive deputy chairman responsible for consolidation strategy. The proposal would see Trevor Matthews continuing in his current role as group chief executive.

In a statement released this afternoon, Resolution says it “welcomes today’s statement by Friends Provident endorsing the benefits of Resolution’s consolidation strategy and recognising the value potential to Friends Provident’s shareholders of being part of Resolution’s plans for the UK life sector”.

Resolution also says it “welcomes Friends Provident’s willingness to engage in discussions” but the brief statement gave no further indication of the group’s view on the details of Friends’ proposal.

Friends’ proposal would see it become the holding company of the combined group, with Resolution shareholders exchanging their shares in Resolution for new shares in Friends Provident.

Friends Provident says that it sees advantages in UK life industry consolidation and says that there is a “real opportunity” for it and Resolution to lead the way in market consolidation.

Friends Provident says the unified management and board would be better suited to supervise the existing Friends Provident businesses as well as any future acquisitions as well as offering full transparency for shareholders, customers and regulators.

It says this would also allow Friends Provident to remain on the London Stock Exchange and UK index membership.

Chairman of Friends Provident Sir Adrian Montague says: “Our Board has thought long and hard about Resolution’s proposal. We recognise the shareholder value that consolidation could bring and we can see the benefits of combining two strong executive teams.

“The potential of the new group will only be realised if we have the right structure from the outset. This is not simply about corporate governance and ensuring that the key executives actually sit on the main board. It is about creating a unified and coherent management structure, with fair common incentives, clear roles and effective accountability.”

Montague says that if Resolution is prepared to accept these proposals, then Friends Provident will begin to agree terms which are fair to both sets of shareholders.


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