Friends Provident agrees £1.86bn takeover
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Your support makes all the difference.Life insurer Friends Provident today recommended a £1.86 billion takeover offer by investment firm Resolution.
Friends - which traces its history back to 1832 - agreed a deal after Resolution's fourth approach since early July.
The all-share deal values Friends at 79.4p a share but there will be a cash alternative for the first 2,500 shares held by investors - benefiting around 700,000 smaller shareholders in the business.
Friends has around 2.5 million customers in its UK life and pensions business and is a member of the FTSE 100 Index following its demutualisation in 2001.
Resolution is an investment firm set up by insurance tycoon Clive Cowdery to buy up under-performing financial services firms. Former Financial Services Authority boss John Tiner is chief executive.
The company intends to follow up the Friends deal with further acquisitions among insurance and asset management firms.
Friends chairman Sir Adrian Montague said: "The transaction offers shareholders the choice of an attractive premium on exit or the opportunity to be part of Resolution's first financial services restructuring project."
The insurer had previously rebuffed its suitor on price grounds as well as concerns over corporate governance at the Guernsey-based firm.
Friends said parts of Resolution's structure and governance were "totally inappropriate in a public company context" and against current best practice.
But talks were reopened two weeks ago, reportedly after pressure from major Friends shareholders keen to see a deal.
On completion of the takeover, the Friends Provident name will be used for the holding company of Resolution's UK business, as well as any subsequent stock market listing.
Friends chief executive Trevor Matthews and financial director Evelyn Bourke will continue in their current roles.
The news came as Friends posted a worse-than-expected 38 per cent fall in underlying operating profits to £131 million in results for the first half of the year.
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