Friends Provident rejects Cowdery's merger plan
By Quentin Webb and Lorraine Turner
LONDON (Reuters) - Friends Provident rejected a takeover proposal from Clive Cowdery's Resolution, saying the entrepreneur's terms were inadequate, his company was opaque and a tie-up would hobble the life insurer's management.
However, shares in Friends Provident Group FP.L leapt, pointing 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.
In a statement on Monday, Friends Provident said Cowdery's Resolution (RSL.L), based on the island of Guernsey, had proposed an all-stock deal consisting of 0.8 new Resolution shares for every Friends share.
But it said this was wholly inadequate to compensate Friends Provident's 750,000 shareholders for a "very different type of investment".
It said the proposed set-up's complexity would hinder Friends Provident management strategically and operationally and would offer shareholders less transparency.
"We are open-minded about the benefits of industry consolidation, but at this stage, the pace, direction and value of your consolidation strategy is speculative and uncertain," Friends Chairman Adrian Montague wrote in a letter to Resolution published on Monday.
The proposed deal would leave Friends shareholders with about 74 percent of the combined group.
DIFFICULT OUTLOOK Continued...
Retail sales to dip in 2010
Retail sales will be flat over Christmas and will fall 1.5 percent in 2010 as rising unemployment and taxes take their toll, business advisory firm Deloitte forecasts. Full Article

UK
US