Friends Provident rejects Resolution's sweetened offer

The UK life insurer Friends Provident Plc has rejected a sweetened offer from Clive Cowdery-owned insurer Resolution Ltd, a company focused on acquiring businesses in the life assurance, asset management, general insurance and financial sectors.

Friends Provident said in a statement to the London Stock Exchange (LSE) that the terms and structure of the proposal remain wholly inadequate, adding that it had terminated the discussions and sees no basis for further engagement with Resolution.

In a revised proposal  yesterday, Resolution had offered to buy the 177-year-old Friends Provident for 0.82 of its shares for each of Friends Provident share, valuing the Dorking-based company at £1.7 billion.The plan included a cash element of £500m.

Resolution also said it would pay an annual dividend to the insurer's shareholders in respect of 2009.

Mike Biggs, the chairman of Resolution, said, "We are putting forward proposals that we believe will be attractive to Friends Provident shareholders and allow Resolution to deliver consolidation in the UK life sector, to the benefit of all shareholders in the sector."

The insurer had on 13 July rejected an offering of 0.80 Resolution shares for every Friends Provident share.