Friends snubs fresh Resolution bid

Friends Provident rejected third takeover proposal from investment firm Resolution

Life insurer Friends Provident said it had snubbed a third takeover proposal from investment firm Resolution and ended talks.

Friends described Resolution's latest cash and shares approach - which valued it at around £1.75 billion - as "wholly inadequate".

"The board sees no basis for further engagement with Resolution and has terminated discussions," Friends said.

Resolution first approached Friends over a possible deal at the beginning of July, but Friends has had concerns over corporate governance issues.

Friends has said parts of Guernsey-based Resolution's structure and governance were "totally inappropriate in a public company context" and against current best practice.

Resolution added a cash element to its all-share proposals in an attempt to win shareholders around to the approach.

But Friends turned the tables on Resolution with its own proposals for a merger last week, which would see it effectively buy Resolution in an all-share deal, with Friends chief executive Trevor Matthews in charge.

Under Friends' plans, Resolution chairman and founder Clive Cowdery would have become executive deputy chairman responsible for consolidation strategy, while Mike Biggs at Resolution would take on the role of chairman.

In the Resolution approach, the Friends Provident name would be used for the holding company of Resolution's UK business, as well as for any subsequent stock market listing.

Mr Cowdery sold his first company - the UK's biggest manager of closed life insurance funds, also called Resolution - to privately-owned Pearl in 2008.