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Royal London emerges as main bidder for Britannic

Royal London has emerged as the leading candidate to acquire Britannic amid industry speculation that Britannic is struggling to attract a buyer or merger partner.

Britannic chairman Harold Cottam effectively put the company up for sale earlier this month after a fall in operating profits to £101.6m from £174.5m, taking into account a £43.8m write-off at mortgage arm Britannic Money.

But it is understood that Royal London is the only product provider that has expressed an interest in acquiring the business as a whole, which also encompasses Britannic Retirement Solutions and Britannic Assurance.

Other companies in the frame such as Aegon and GE Capital are thought to be keen to acquire the investment arm,Britannic Asset Management, but not any other part of the group. Cottam is understood to prefer a deal that would not break up the company.

Royal London acquired United Assurance Group in 2000 and Scottish Life last year and holds a 12.05 per cent stake in Britannic. But as result of these deals, it is unclear whether it has the resources to table a bid – Britannic&#39s market capitalisation is around £1.3bn.

Cazalet Financial Consulting principal Ned Cazalet says: “Royal London fits very nicely with Britannic, both in term of their home services and potential cost savings. But with Royal&#39s capital expenditure, the question is whether it has enough left to buy it.”

Royal London head of communications Stephen Humphries says: “We do not want to comment on speculation.”

Royal London restructure, p17

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