Phew.
It took an improved offer, but Clive Cowdery’s Resolution has done it. UK-listed insurer Friends Provident has accepted a takeover offer from the specialist Guernsey-based buyout group on Tuesday — although it pretty much hinted as much on Monday. The deal sees it receive 0.9 new shares for every FP share — an improvement to the previous 0.8 new share offer — and values the group at £1.86bn.
Also included is a cash alternative totalling £500m for the first 2,500 shares held by each Friends Provident investor. Friends Provident shares were up about 4 per cent to at 78p at the open in London.
Here are the key terms as set out in the statement:
* Total consideration of £1,858 million (based on a Resolution Share price of 88.25 pence as at close of trading on 7 August 2009);
* 0.9 of a New Resolution Share per Friends Provident Share;
* Cash consideration for up to the first 2,500 shares held by each Friends Provident Shareholder at 79.4 pence per Friends Provident Share;
* Total cash consideration of up to £500 million at 79.4 pence per Friends Provident Share (including the cash consideration in respect of up to the first 2,500 shares);
* Total consideration representing 69 per cent. of adjusted EEV as at 30 June 2009;
*Transfer to a primary listing on the Official List of the UKLA at completion;
*Inclusion in FTSE index expected to follow completion;
*Friends Provident interim dividend of 1.3 pence per share to be paid before completion of the Acquisition; and
* Resolution to commence paying dividends from completion – currently expected to pay a final dividend of 2.72 pence2 per Resolution Share in respect of the second half of 2009.
Of course, one area the two firms had previously differed on was corporate governance. But that issue too appears to have been amicably resolved (our emphasis):
Following Resolution’s original approach, the Friends Provident Board expressed certain initial concerns over Resolution’s structure and governance arrangements, particularly in relation to the suitability of Resolution Shares for Friends Provident’s large retail shareholder base. Friends Provident has now had the opportunity to examine Resolution’s business model and structure through engagement with Resolution and through discussion with, among others, the FSA and major shareholders of both companies.
Friends Provident also appreciates Resolution’s commitment in its IPO prospectus to seek to transfer to a primary listing upon completion of its first acquisition. Friends Provident has now concluded that Resolution’s governance arrangements, business model and alignment with investors reflect and support its objective to create value for public market investors from the restructuring of financial services businesses.
Related links:
An amicable Resolution? - FT Alphaville
Resolution suffers Friends setback – FT