Cowdery to press ahead with Resolution listing in December

Company targeting asset managers and life insurance
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The Independent Online

Clive Cowdery will brave one of the worst markets for initial public offerings in history when he goes ahead with the listing of his second Resolution vehicle next month. Mr Cowdery has decided the need to have cash and currency to do deals in coming months has become stronger than hitting the best value for the IPO.

The company, the Guernsey-based Resolution Limited, plans to seek acquisitions in the financial sector. It is most likely to start with UK asset managers or life insurance businesses. Over time, it also plans to target companies in the general insurance, banking and diversified general financial sectors across western Europe.

Mr Cowdery, formerly head of GE's primary insurance operations in Europe, created Resolution Life Group Limited in 2003. He then led a reverse takeover of Britannic Group which gave his company its first stock listing in 2005. He ran the combined company until the completion of the sale of Resolution plc to Pearl, run by his arch-rival Hugh Osmond, in May for £5bn.

The market for IPOs has all but dried up over the past year as market volatility makes pricing such issues difficult and most chief executives opt to wait for better times before listing their shares. Most new shares issued have been a means of raising funds for distressed banks and other financial services companies.

But Mr Cowdery is looking to have funds to mount bids for companies, and sees opportunities in today's distressed markets as many financial companies see the value of their shares tumble amid panic about asset writedowns and the economic outlook. The actual value raised is secondary to having enough cash to be able to take part in the upcoming rash of distressed mergers and aquisitions expected in coming months.

The company is positioning itself particularly to take advantage of an expected increase in M&A opportunities in the financial sector. Many fund managers have suffered as volatile markets and redemptions from their investors have stretched their ability to make money and hurt the value of their shares. And investment bankers and industry insiders are also speculating that many banks, which are being bailed out by governments across Europe, may seek to offload assets such as life insurance businesses that are non-core as they restructure. With rival banks and insurers often in a similar state, they may have trouble finding trade buyers, and Mr Cowdery hopes to step in and grab the businesses.

Among insurance businesses for sale are Royal Bank of Scotland's insurance arm, as well as, potentially, HBOS's life insurance unit after the firm is bought by LloydsTSB.

Resolution plans to use its shares as currency in any acquisitions and to add value by restructuring its targets and amalgamating assets into its fund.

"We want to have enough money to be a serious proposition," said John Tiner, chief executive of Resolution. While the firm is aiming to raise between £500m and £1bn, "acquisitions may be of much higher value than that, which we will want to finance with rights issues", he added.

The company hopes the ability to issue traded shares to pay for acquisitions gives it an edge over other private equity-like financial services acquisition vehicles, which need to rely on debt, as banks have become very reluctant to lend for deals in the current market.

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