UPDATE 3-Friends Provident rejects Cowdery's merger plan

* Friends Provident rejects Resolution approach

* Resolution proposes 0.8 new share for every Friends share

* Values at 1.7 bln stg based on Resolution's Friday close

* Friends shares rise 10 percent, Resolution down 2pct

(Updates shares, adds Resolution shareholder comment)

By Quentin Webb and Lorraine Turner

LONDON, July 13 (Reuters) - Friends Provident FP.L rejected a takeover proposal from Clive Cowdery's Resolution Ltd (RSL.L), saying the entrepreneur's terms were inadequate, his company was opaque and a tie-up would hobble the life insurer's management.

However a sharp rise in Friends Provident Group Plc shares on Monday pointed to investor expectations of a sweetened offer and some analysts hailed what could be the first step in a long-awaited consolidation of the sector.

Friends Provident said Cowdery's Resolution, based on the island of Guernsey, had proposed an all-stock deal consisting of 0.8 new Resolution shares for every Friends share.