Friends Provident and Resolution have changed the terms of their proposed merger for a second time in a bid to prevent rivals scuppering the deal.
The agreed tie-up will now see Resolution as the offerer rather than Friends. This means Resolution just needs to achieve a straight majority of shareholders while Friends needs 75 per cent of its shareholders to approve the creation of Friends Financial. The commercial terms of the deal remain the same.
The move follows Pearl last week getting FSA clearance to acquire 20 per cent of Resolution. Pearl currently holds 16.5 per cent and, under the terms of the previous deal structure, would just have had to build a stake above 25 per cent to be able to block the merger. Pearl director Hugh Osmond could still launch a full cash bid for Resolution and speculation is mounting that he might look to tie-up with other insurers to try to broker a deal.
Meanwhile, Resolution is to acquire Scottish Provident’s broker consultant business from Abbey for Intermediaries. Resolution says the move for the business which has 65 staff will boost its distribution in the IFA market and help it to manage its costs. Resolution had been paying Abbey introducer fees after its acquisition of the Abbey Life businesses in September 2006.
Resolution head of UK new business Hugh McKee says: “We are delighted to have the distribution channel within Resolution. It is important to have an alignment between distribution channels, product development and marketing.”
Abbey spokesman David Stewart says: “This development gives Resolution an intermediary salesforce and will free Abbey to focus on the strong delivery of its core business of mortgages and general insurance.”