No resolution in the unpredictable world of M&A
Standard Life looks set to throw a spanner in the works of the proposed merger of Friends Provident and Resolution.
Sandy Crombie, group chief executive at Standard Life, released a statement last month stating that it was "monitoring the announced proposed merger between Resolution and Friends Provident" and was considering "the possibility of a cash and shares offer for Resolution".
This is a 180-degree U-turn for the provider, which earlier effectively ruled itself out of proceedings when it said it was not going to become involved in the acquisition.
The news broke after Resolution and Friends Provident announced a change to the legal structure of their merger that reversed the scheme of arrangement, meaning it will require 75% of Friends Provident and a straight majority of Resolution voting shareholders to approve it.
The robust half-year financial report from Resolution stated that: "Following the merger, Resolution shareholders and Friends Provident shareholders are expected to hold 50.9% and 49.1% of Friends Financial respectively."
Standard Life is just the latest in a string of providers that look set to have their name associated with the biggest acquisition the market has seen over the past year.
Earlier in the year, Prudential was in talks with Resolution prior to its decision to tie up with Friends Provident.
Pearl Group was another name rumoured to be intending to upset the proposed Friends Provident and Resolution merger by launching a potential multi-billion-dollar takeover bid of Resolution, its rival in the market, and then selling off parts of its rival that did not fit with its own company.
Peter Le Beau, managing director of Le Beau Visage, described the current mergers and acquisitions drama as an "interesting example of how the new acquirers like Pearl and Resolution were crystallising value in the market".
He added: "It is no longer possible to do a big deal quietly and this is in the interests of shareholders and usually, ultimately policyholders. Before hitting a slightly less successful patch Friends Provident was carrying all before it and I think it is an excellent office. Standard Life may see a good strategic fit with its operation as Friends Provident is much stronger in protection."
