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Life assurer Friends Provident today slammed the door on Resolution boss Clive Cowdery and said discussions about a possible tie-up were well and truly over.
After weeks of talks between the two sides, Friends chairman Sir Adrian Montague and chief executive Trevor Matthews dismissed the terms and structure of the latest offer from Cowdery as “wholly inadequate”.
A terse statement to the stock exchange added: “The board of Friends Provident sees no basis for further engagement with Resolution and has terminated discussions.”
The aggressive rebuttal appeared to mark the end of the will-they-won't-they courtship and governance squabble between Friends and Resolution.
It also marked a determined turnaround by Friends, which until now was willing to talk to Cowdery to try to secure a deal so long as the terms were right. However, with both sides keen to see consolidation in the industry, analysts said talks could be revived at some stage in the future. “You never know with Clive Cowdery,” said one City observer.
Resolution last night tabled its third offer to Friends, a takeover for 0.82 of a Resolution share for every Friends share valuing the 177-year-old life assurer at 74.6p a share, or £1.7 billion. Although the offer included a £500 million sweetener for retail shareholders in the form of cash payments, it was worth little more than previous offers and failed to address governance issues at Resolution seen as “totally inappropriate” by Friends.
Montague and Matthews are known to be concerned about Resolution's offshore base in Guernsey and a lack of transparency in the Cowdery empire.
They are also sceptical about the 10% of profits which could be earned by Resolution chiefs Cowdery, Mike Biggs and former Financial Services Authority chief executive John Tiner.
Cowdery, who acquired a raft of zombie funds at his previous firm, also called Resolution, which he then offloaded to Hugh Osmond's Pearl Group last year, was last week told to make concessions if he wanted to secure a deal with Friends.
Friends shares were down 0.42p to 70.37p today, valuing it at £1.6 billion.
On 12 July, Friends rejected an initial takeover proposal offering 0.8 Resolution shares per Friends share. Resolution was set up last year to buy and consolidate insurers and asset managers.
