Resolution has been the subject of a three-way bidding war with Standard Life and rival Pearl Group heading the offers, and Friends Provident also making a bid for the UK insurer. Initially Resolution directors agreed to recommend Standard Life’s bid of 715 pence per share, but following further details of the £4.9 billion offer, the UK insurer confirmed it could not go through with the offer without the backing of Pearl Group, which had increased its shares in Resolution to 24.2 per cent – enough to block the offer of rival bidder Standard Life.
The Takeover Panel, has also indicated that the Standard Life bid had created false demand for Resolution shares, following its announcement that it would be looking for ways in which to restructure its offer. The Panel suggested that a firm could not suggest that it might improve its offer, without actually doing so.
Hugh Osmond, chief executive at Pearl Group, admitted that he was unsure why Resolution’s board had not recommended the higher Pearl offer, of 720 pence per share. He indicated that the company ‘has difficulty understanding why the board of Resolution is now not recommending Pearl’s higher and more certain cash offer’.
He added: “Pearl urges Resolution to cease switching recommendations between a series of complex mergers, none of which it believes have strategic or commercial logic, and instead to recommend Pearl’s increased all-cash offer.”
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