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Standard Life and Swiss Re could be making a new Resolution

16 October 2007
There is increasing speculation over UK-based financial services company Standard Life and Zurich-based reinsurance company Swiss Re’s plans to acquire UK closed life funds investor Resolution.

According to a statement from Standard Life, its board of directors “believes there are attractive potential synergies to be generated from a combination of Resolution’s assets with its own operations.”

A merger of Resolution and Friends Provident is be voted on by shareholders on November 5, in order to create Friends Financial Group plc, with a value of approximately £8 billion.

Standard Life and Swiss Re have confirmed their interest in the company and are said to be putting the finishing touches on a joint offer. It is thought the bid will be around 700p per share and will be submitted by the end of the week.

However, the statement said that: “An offer would only be made if the board of Standard Life considered that it was financially attractive and would enhance value for Standard Life shareholders over both the short and long term.”

Resolution recently rejected a £4.5 billion (660p per share) offer from Pearl Group, which had reportedly been in talks with Standard Life regarding a joint takeover earlier on. It is believed that Pearl, which already has a 16.5 per cent stake in the company, may now offer a higher bid.

A takeover panel has set October 25 as the deadline for potential acquisition offers, which will precede the stakeholders’ vote on the merger with Friends Provident.

Meanwhile, if the Resolution and Friends Provident merger does not take place, Friends Provident may be approached by Zurich Financial Services or AXA, both having indicated some interest in the company.

© Fair Investment Company Ltd