Friends Provident shares rise after bid talk 04/09/2008 - 08:59:00
Friends Provident shares opened higher today after it was reported insurance entrepreneur Clive Cowdery had the life assurer in his sights.
The Financial Times said Mr Cowdery, who last year attempted to merge his Resolution business with Friends, viewed the company as a potential break-up target. Options are said to range from him taking a stake in the firm through to a full takeover, although the FT said no talks had been held.
Friends is currently involved in its own break-up plan after deciding to concentrate on core areas such as protection, segments of group pensions and annuities for existing pensions customers.
However, current market conditions have hampered the proposed disposals of European wealth manager Lombard, a 52% stake in fund manager F&C and high net worth intermediary Pantheon.
Trevor Matthews, who took over as Friends chief executive in the summer, insisted yesterday that Lombard or the F&C stake would not be sold unless the company got a good price.
Today’s FT said Friends was among a number of opportunities being looked at by Mr Cowdery.
He came close last year to merging his Resolution business with Friends, but instead sold the close life fund consolidator to Hugh Osmond’s Pearl for just under £5bn (€6.1bn).
The failure of the Resolution tie-up raised concerns that Friends would not have enough financing to fund expansion. It responded with the strategy review, which it said would make the group “self-financing and well capitalised”.
The reported interest from Mr Cowdery caused Friends shares to rise by more than 2% today. The stock fell as low as 77p in July but was back above £1 today.
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