JC Flowers is preparing to contact shareholders of Friends Provident to press the case for its £3.5bn takeover proposal for the insurer after unveiling details of its approach yesterday.
The information revealed by the private equity firm included the names of its financial backers and a panel of heavyweights it has lined up to sit on the insurer's board.
Friends Provident said there was little in Flowers' statement that was not in the proposal it received last month. The life company said it had not changed its position that the approach was not a basis for discussions.
But putting the information in the public domain frees Flowers to approach shareholders without falling foul of rules on fair disclosure. An investor in Friends Provident said: "It will be quite difficult for the board to refuse to talk to Flowers in these circumstances. I would like to see the companies talking."
The US private equity firm said Royal Bank of Scotland, Morgan Stanley and Citigroup were waiting to underwrite the debt component of its bid proposal. Flowers said the acquisition would be funded mostly with equity from more than $6bn (£3bn) in its own investment funds and those of other investors.
Flowers announced a group of advisers it would make directors of the company: Sir Martin Jacomb, chairman of Canary Wharf and former chairman of Prudential; Sir Steve Robson, a former Treasury mandarin whose non-executive directorships include Royal Bank of Scotland and JPMorgan Cazenove; and Tom Fraser, chief executive of Private Estate Life, a life insurance company owned by JC Flowers, and former head of international operations at CGNU.
The buyout firm, headed by the billionaire former Goldman Sachs partner Christopher Flowers, has proposed a take-over of Friends at 150p a share. It has stalked the insurer since late last year and built a stake of 2.7 per cent. After Friends complained that uncertainty over Flowers' intentions was disrupting its business, the Takeover Panel told Flowers last week to make a firm offer by 30 April.
The Friends Provident investor said that most shareholders would probably take 160p a share from Flowers. He added that Friends Provident now needed to engage with Flowers if it was to push the price up.
Flowers said it had bought the shares at an average price of 155p a share between 22 November and 13 December with the highest price being 165p a share. The firm would need the consent of the Takeover Panel to make a bid for Friends Provident below 165p. The panel could take into account the fall in Friends Provident's share price and a recommendation by the board.
Friends Provident shares rose 2.3 per cent to 137p, but they are down 16 per cent this year.Reuse content