Standard Life sticks to Resolution despite slap on the wrist

30 October 2007
The Takeover Panel has reprimanded Standard Life regarding its £4.9 billion bid for Resolution, claiming it has flouted takeover rules. This follows the revelation that Resolution has withdrawn its support of the company’s bid.

The panel, which has been monitoring the procedure from the off, says it broke the Takeover Code rules. This relates to Standard’s statement that it was considering other options linked with its offer without actually laying out what the changes would be. It has also failed to confirm whether a restructured offer would definitely be put forward.

The ticking off is very rare as far as the panel is concerned, and adds to earlier criticism offered by rival bidder Pearl Group. Pearl has repeatedly said that Standard’s original bid – which it countered with a slightly higher offer – was not well thought through.

Pearl, which owns 25 per cent of Resolution’s shares, is now possibly the frontrunner among the acquisition hopeful, despite an earlier rejection from Resolution.

The company, owned by Hugh Osmond, is said to be “extremely sceptical” about a reworked Standard Life offer, and has urged Resolution to consider its increased cash offer instead. Resolution has not yet said whether it will back the Pearl bid, and its board is likely to await the outcome of further talks before making another recommendation.

In its defence, Standard Life says it “"continues to believe strongly in the strategic rationale" of its offer and, although Resolution has withdrawn support for the Standard “in its current form”, it says that it "continues to see real strategic benefit in the combination of Resolution and Standard Life".

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