Gloves off for Standard Life and Pearl as they fight for Resolution
02/11/2007
Standard Life has responded to accusations from Pearl Group about its bid for closed life funds company Resolution.
Pearl has questioned the Edinburgh-based company’s ability to improve on its original £4.9 billion offer, which it countered almost immediately. As Pearl now owns almost a quarter of Resolution’s shares (24 per cent), it has blocked Standard's cash and stock bid, forcing it to restructure its offer.
Hugh Osmond’s Pearl has described any attempt to increase its bid would be “value destructive” and, as Keefe, Bruyette and Woods insurance analyst Steven Haywood points out, Standard would still require Pearl’s backing if it submits a new offer.
Standard Life has responded strongly to Pearl’s comments, which it describes as “self-serving and potentially misleading”. In relation to its acquisition proposal, chief executive, Sandy Crombie, said: "We believe that our acquisition represents a better fit with Resolution." The company expressed hopes that shareholders would not be misled or overlook its investment potential.
Meanwhile, insurance provider Royal London has reported a decline in new business, which has negatively impacted its share prices. The company, which was set to buy some of Resolution’s assets in the case of a Pearl takeover, may now have to reassess its plans.
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