From Resolution, the British insurance acquisition specialist insurer acquisition specialist, on Wednesday…
Simplifying the governance structure and focus on delivering shareholder value Read more
It’s hard to see the point of some businesses. This week the particularly pointless Resolution produced an interminable, impenetrable statement. Its bosses have decided that something must be done, and breaking it up is something, so it must be done. Resolution calls this a “self-managed exit plan”. It’s tough on the shareholders, who had been anticpating their own exit plan, in the form of a £250m cash return which they had been half-promised by the management.
Alas, the markets have been too choppy for the lash-up that is SS Resolution to remain seaworthy without the £250m, so the company is to be split between a business which may or may not have a future, and one which definitely doesn’t. It may even add value for shareholders, despite what are delicately described as “dis-synergies arising from separating into two separate businesses” but it would be unwise to bet on it. Read more
So, Clive Cowdery won’t be trying to retake control of his first Resolution vehicle via a bid for the Phoenix Group.
Tim Tookey, Lloyds’ finance director, is to resign from Britain’s biggest high-street lender to become chief financial officer at Friends Life, the UK life assurance company created by Clive Cowdery’s Resolution consolidation group. The FT says Mr Tookey, a pivotal figure in helping Lloyds to secure a crucial £20bn-plus recapitalisation two years ago, denied the move was due to any falling out with the bank’s new chief executive, António Horta-Osório, who joined the bank from Santander UK and took over as CEO in February. Mr Tookey was said to have concerns about the credibility of Lloyds’ new financial targets – 15,000 job cuts, £1.5bn ($2.3bn) of annual cost savings, an increase of as much as 10 per cent in the net interest margin and a return on equity of up to 14.5 per cent, all by 2014 – especially given the discouraging macroeconomic backdrop. Read more
Resolution, the UK investment vehicle set up by insurance entrepreneur Clive Cowdery, has acknowledged it must find fresh funding for a new venture if it wants to pursue deals beyond the UK life assurance sector, reports the FT. After investors urged the specialist consolidation vehicle not to deviate from its current project, John Tiner, chief executive said the board would consider a response when it reports full-year results on March 24. Tiner spoke after an investor presentation on progress by Friends Life, the company being built from Resolution’s first three acquisitions: Friends Provident; most of Axa’s UK life arm; and the smaller deal for Bupa’s life unit. Resolution confirmed that further UK life acquisitions were unlikely. But Lombard says the FTSE 100 company has “missed its mark in business mix, scale and value creation”. Read more
Resolution, the investment vehicle set up by UK entrepreneur Clive Cowdery, is unlikely to make further acquisitions this year in its UK life assurance consolidation project after a poor stock performance in 2010, focusing instead on generating returns from businesses it has bought, reports the FT, citing bankers and analysts. The company has completed three deals in the sector since it launched in late 2008, raising almost £3bn of cash from rights issues in the process. But it is nearing a self-imposed summer deadline for the acquisition phase of the project. Regulatory uncertainty and insurers’ reliance on cash flows from historic books of life assurance business have deterred potential sellers from doing deals, while Resolution shareholders are reluctant to back more equity issues. Read more
Regulators are struggling to create a global mechanism that could wind down a big financial institution without the disruption caused by Lehman Brothers’ collapse in 2008, reports the FT. The US is due on Tuesday to propose its own so-called “resolution” regime that would allow officials to stabilise a big, distressed bank, sell off assets over time and force creditors to take a discount on the value of their debt, without taxpayer money or market disruption. But policymakers attending meetings around the International Monetary Fund and Institute of International Finance criticised the US regime and cast doubt on whether anything but a modest set of principles could be agreed at the Group of 20 meeting in Seoul next month. Read more
Prudential was trading top of the FTSE gainers board on Monday on news a group of Chinese investors were considering a break-up bid for the UK insurer. According to the Sunday Times, the billionaire entrepreneurs were among the Asian backers who wanted to throw their weight behind Prudential’s failed $35bn takeover bid for its Asian rival AIA earlier this year. But, according to FT Alphaville, there are a number of reasons to be sceptical about the idea of a Pru break-up — among them the cash-flow dynamics. Read more
Resolution has clinched its £2.75bn deal to buy most of Axa’s UK life assurance operations in a deal that takes the group another step along its path to create a £10bn life and pensions company, the FT reports. Resolution said on Thursday that its shareholders had unusually pre-committed to take up 52 per cent of the £2bn rights issue being used to fund the deal before the final terms of the takeover were announced. Read more
Insurers Resolution and Axa hope to agree the £2.8bn sale of a chunk of the French group’s UK life assurance business by mid-next week, the FT reports. The two companies on Monday confirmed talks and gave details on the price and financial structure of the proposed sale, although they said there was no certainty of a final agreement. Lex says the deal seems to offer “jam tomorrow for Resolution’s investors, but today for Axa’s”. Read more
Does this sound familiar?
UK insurance company announces plan for transformational acquisition, funding by a large rights issue, deal maths only stack up if ambitious cost and revenue synergies are achieved. Read more
Resolution Group, the vehicle set up by UK investor Clive Cowdery, and US buy-out group Blackstone, are in the running to join National Australia Bank in a potential bid for the 318 branches being sold by RBS. NAB, which owns the Clydesdale and Yorkshire banks, is among groups believed to have given early expressions of interest in bidding for the branches, which RBS has to sell to comply with European state-aid rules. Read more
Resolution finally captured Friends Provident on Tuesday after the life assurer’s board recommended the latest £1.86bn offer from Clive Cowdery’s Guernsey-based acquisition vehicle. The deal was announced as Friends reported disappointing first-half results, although it held out the prospect of a boost to its full-year figures by cutting back its “extremely conservative” reserves against corporate defaults. More detail at FT Alphaville. Read more
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. Read more
Breaking pre-market news on Tuesday,
- Resolution to buy Friends Provident for $3bn – statement. Read more
UK insurance entrepreneur Clive Cowdery is poised to strike to take over Friends Provident, in a deal that values the UK life insurer at £1.87bn, two years after Cowdery tried to merge his first Resolution vehicle with the company. Resolution Limited, Cowdery’s second consolidation vehicle, is expected to announce a firm offer on Tuesday to acquire Friends. Friends confirmed on Monday it had received a further takeover proposal from Resolution and that it had re-entered talks “with a view to recommending” the deal. Read more
Clive Cowdery’s Resolution is inching towards a takeover of Friends Provident after the two sides neared an agreement over the valuation of the life assurer over the weekend. Both sides are trying to reach agreement before the time Friends announces its interim results on Tuesday, in a deal that will value the company at £1.86bn on Friday’s closing share prices and launch Cowdery’s project to lead a consolidation of sub-scale UK life assurance companies. Read more
Friends Provident has attempted to kill off the chances of a takeover by Resolution, Clive Cowdery’s UK-listed acquisition vehicle, by saying its latest offer – worth £1.7bn – delivered on Sunday was still “wholly inadequate”. But people close to the talks said the only obstacle was the valuation put on Friends and that a final offer would probably be made in “days rather than hours”. Read more
Friends Provident on Monday rebuffed a fresh takeover proposal from Clive Cowdery‘s Resolution after a frosty meeting that left the two sides at odds over the structure of a merged group, the FT said. Mr Cowdery said his Guernsey-based company would not make an offer for Friends that compromised Resolution’s status as a separate vehicle designed to pursue various consolidation projects. Friends criticised Resolution’s structure as “totally inappropriate”, but Lex believes Friends is merely holding out for a knock-out offer that satisfies all shareholders. Read more
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