Standard Life shares rise as it gives up Resolution

13 November 2007
The battle for life insurance company Resolution appears to be over as one of the two main contenders, Standard Life, has pulled out citing “extreme market conditions” as its reason for deciding not to pursue a deal.

Hugh Osmond’s Pearl Assurance now looks set to take over Resolution and has raised its stake in the company to 25.93 per cent having purchased another two million shares on November 9 and a further ten million on November 12.

Pearl trumped Standard Life’s bid within hours at the end of October, offering 720p a share (£4.93 billion) for the group compared with the Edinburgh-based company’s offer of approximately £4.9 billion. And Standard Life has now decided against restructuring its original bid following a sharp decline in its share price.

Pearl welcomed the announcement, describing it as “very good news” although it is possible that Resolution chairman, Clive Cowdery, will now urge the company to up its bid before recommending its offer to the board.

Mr Osmond has speculated that the drop in Standard Life’s share price reflects investors’ lack of support for its takeover plans. Its chief executive, Sandy Crombie, has faced a fair amount of criticism over his actions during the bidding process.

Further talks between Mr Osmond and Mr Cowdery are expected to take place in the next few days and the two are likely to set aside their alleged long-term feud as takeover talks continue.

Since withdrawing from the battle of the bids, Standard Life shares have soared in price, almost hitting the same level registered before the potential Resolution takeover came to light.

Find out more about Pearl endowments and Standard Life pensions

© Fair Investment Company