Phoenix talks with CVC collapse
Saturday 11 February 2012
Takeover talks between the insurance company Phoenix and the private equity house CVC that have been rumbling on since November collapsed yesterday.
The two sides were unable to agree on a price, and analysts say that no new suitors for the insurer are likely to rise.
Phoenix is lumbered with debts of £2.7bn, an amount in keeping with its occasional description as a “zombie” firm – it does not write new policies, instead taking a slice from the value of managing old ones sold by a bunch of now-departed insurers such as London Life.
Clive Bannister, Phoenix’s chief executive, said: “Whilst the board is obliged to consider credible approaches, the terms proposed by CVC did not reflect our view of the full value of Phoenix and its stable, long-term cash flows.
“As a result, we have mutually decided to terminate these discussions.”
Phoenix, formerly known as Pearl, has been hampered by a heavy debt burden taken on to finance the £5bn acquisition in 2007 of a portfolio of closed life funds which was put together by Clive Cowdery, the founder of the insurer Resolution.
The Investec analyst Kevin Ryan said that this had proved to be a major stumbling block in any takeover of Phoenix, and that it was unlikely any other bidders would now emerge.
“The challenge with Phoenix is the company’s capital structure and all that debt. It always looked as if a deal would be hard to pull off,” he said.
Phoenix shares fell 8.5p to 561p, leaving it valued at £979m.
Phoenix lost its finance director, Jonathan Yates, in December. He is taking up a new role as chief executive of Guardian Financial Services this month.
- 1 Isis 'jihadi bride' claims forced sex with Yazidi girls is never rape because Koran condones it
- 2 Woman accidentally shoots herself in the head while posing for a selfie
- 3 Art Garfunkel: Paul Simon is a 'monster' with a Napoleon complex
- 4 Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
Isis 'jihadi bride' claims forced sex with Yazidi girls is never rape because Koran condones it
Woman accidentally shoots herself in the head while posing for a selfie
Isis burns woman alive for refusing to engage in 'extreme' sex act, UN says
Puerto Rico, island of lost dreams: People are leaving the debt-hit territory in droves as near neighbour Cuba's star rises
16-year-old girl beaten and burned alive by lynch mob in Rio Bravo, Guatemala
As a white man, I'm surprised more women aren't tweeting the hashtag #KillAllWhiteMen
Scotland may have to leave the EU even if it votes to stay in, David Cameron confirms
The day that Britain resigned as a global power
Almost a third of school pupils believe 'Muslims are taking over our country', study claims
SNP fury as HS2 finds 'no business case' for taking fast train service to Scotland
Gay marriage 'Bert and Ernie' cake bakery found guilty of discrimination in Northern Ireland
iJobs Money & Business
£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...
£45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...
£45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...
£50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...