Pac-Man back as Friends Provident snaps at suitor Resolution

Friends rejected a £1.6 billion offer from Resolution, founded by insurance tycoon Clive Cowdery, earlier this week. It attacked it for several reasons, including the claim that Resolution bosses would end up paying themselves almost £2 million each under the proposal.

Today, under the advice of Goldman Sachs takeovers supremo Simon Dingemans, it came up with an alternative: "No: we'll buy you." It was a throwback to previous deal-frenzied decades when, with the help of bank loans, companies would bid for their bidders like the 1980s Pac-Man video game character ate its hunters.

Under the Friends offer, executive pay would be more "fairly aligned" with the interests of shareholders and, unlike the Resolution bid which would have moved the operation to Guernsey, would retain the combined company's London Stock Exchange listing.

This would give better transparency to shareholders, customers and regulators, Friends argued, bringing with it the corporate governance and other best practice guidelines that rule quoted companies.

Trevor Matthews, Friends Provident's chief executive, would run the combined business as chief executive, while Cowdery would become executive deputy chairman in charge of "consolidation strategy" - the whole point of merging the two companies is to create a business big enough to buy up lots of smaller life insurers.