Bids from number of other firms for the insurer have complicated initial deal
By Lucy Quinton
The future of Resolution looked set to be finalised at the beginning of this month.
The insurer announced earlier this year that it was to merge with Friends Provident to form Friends Financial. However, whether the deal was going ahead or not became uncertain after several other parties showed an interest in acquiring Resolution.
Firstly, Pearl Assurance made two formal offers that were subsequently rejected, and then Standard Life submitted a conditional approach just hours before the 25 October deadline. As COVER went to press, the Resolution board was set to consider the approach.
Resolution has said in the past that it remained committed to the planned merger that it and Friends Provident's shareholders are to consider on 5 November.
However, Resolution may be tempted by the 714p a share offered by Standard Life even though it was rumoured to only be considering offers over 750p.
Swiss Re has also confirmed that it is in talks with Standard Life if it should merge with Resolution and the duo's plan would be for Standard Life to keep Resolution's asset management arm and Scottish Provident's insurance business while the closed life books would go to Swiss Re.
Officials at Swiss Re declined to offer any further comment than the statement previously issued, which confirmed that it was in discussions with Standard Life to purchase "certain closed books of Resolution's life business should Standard Life make an offer to acquire Resolution".
Barry Cameron, media and planning manager at Standard Life, refused to be drawn on any potential outcome but added that the firm was considering its options carefully.
Richard Verdin, sales and marketing director at Direct Life & Pensions Services, said Scottish Provident was a good company with good products and experts. However, he was concerned about its proposition following an acquisition as the market could never be sure at this stage about the state of its protection offering and what company would be the dominant force. "Would the acquirer or the acquired be the dominant player in this?" Verdin questioned.
Pearl is currently Resolution's largest shareholder and believed the merger between Resolution and Friends Provident would not create as much value for Resolution shareholders as its offer would have. Pearl said it intended to vote against the proposed merger.
Resolution has been a takeover target since it first announced its £8bn merger plans with Friends Provident in July this year.
