Insurer may be running short of friends

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Friends Provident's chairman, Sir Adrian Montague, will come under renewed pressure this week, with the group's proposed sell-off of asset management division F&C, high-end insurance arm Lombard and wealth manager Pantheon now thought to be in grave doubt.



Shares in the insurer dived 7 per cent on Friday amid speculation that Swiss Life, which was leading the bidding for Lombard, had ended its interest in the £600m company.

A deal to sell Pantheon has also stalled, with private equity group AnaCap believed to be balking at Friends' asking price.

A City source said: "Pantheon has become something of a symbol for this whole nightmare. If they can't get a £30m subsidiary sold, what are the chances of getting Lombard and F&C done?"

A number of bidders are thought to be looking at F&C, including the firm's management, led by chief executive Alan Grisay. But it is thought unlikely he could muster enough finance.

A new chief executive, Trevor Matthews, starts at the end of the month. He inherits a management team in tatters, with finance director Jim Smart and pensions boss Ben Gunn both leaving. A source said: "It wouldn't surprise me if Trevor decides to shelve the Lombard sell-off, and maybe even F&C too, given the amount of cash it's likely to fetch in this market."

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