The race for Resolution Life is hotting up after Swiss Re confirmed it is in discussions with Standard Life about launching a joint counter-offer for the firm.
The move follows rival Pearl’s failed 660p-a-share bid last week, which it launched in tandem with Royal London.
The Takeover Panel last week gave the agreed Friends Provident/Resolution merger the green light. But on Tuesday, following the manoeuvering around the deal, it called on Pearl and Standard Life to announce their firm intentions by October 25.
Friends Provident and Resolution are set to put their agreed merger to a shareholder vote on November 5.
Swiss Re says that although no binding commitments had been made, the group is keen to expand its book of closed life business. As part of the deal, Standard is expected to pick up Resolution’s asset management business and its health insurance arm, Scottish Provident.
In a statement to the stockmarket, Standard said: “Standard Life confirms it is in discussions with Swiss Re concerning a possible offer by Standard Life for Resolution.”
Reports suggest Standard may trump Pearl’s offer by tabling a 700p-a-share bid, although many observers expect Resolution to hold out for a higher price.
Pearl last week said it believes the ‘see-through’ market value of the Friends/Resolution merger was only 575p under the terms of the agreed deal. This is based on the market value of 3.25 Friends shares for each Resolution share.
Pearl also criticised the synergy benefits of merging Resolution Asset Management and F&C, which Friends majority owns.
It said the stated annualised cost savings of £100m a year only represent 9 per cent of the combined cost base of the groups and added there are always difficulties in merging such businesses.
Pearl believes the cross-selling opportunities are low between Friends’ customer base, which it says are mainly group personal pension and offshore clients, and Resolution’s, which are mainly in individual retirement, protection and investments.