Resolution asks for deadline for bids

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Resolution asked the Takeover Panel to set a "put up or shut up" deadline on potential suitors yesterday as it tried to persuade investors to back its agreed merger with Friends Provident.

Its move came as Pearl Assurance confirmed its interest in tabling a bid for Resolution and claimed the proposed tie-up with Friends was a risky proposition that did not offer as much value for shareholders as other options.

However, while Pearl said it was considering a bid of a minimum of 660p a share for Resolution, the highest price it has paid in building up its own 16.5 per cent stake in the insurer this year, it warned investors not to expect significantly more.

Pearl argued that press and market speculation about the possibility of a bidding war for Friends had driven Resolution's share price to unrealistic levels. Shares in Resolution fell 2p to 682.5p yesterday, but earlier this month they were trading at above 700p.

Shareholders will begin receiving prospectuses outlining the detail of the Resolution merger with Friends next week, with Pearl saying yesterday that the deal valued Resolution at 575p a share.

Standard Life, which said last week it was also considering a bid for Resolution, refused to comment.

However, a bidding war with Pearl is unlikely, because it is understood the two companies have already held talks about how Resolution might ultimately be split up. Standard is particularly interested in Resolution's Scottish Provident business, while Pearl is focused on the company's closed life funds. The two companies may be able to agree terms on a split of the business, avoiding the need to bid against each other.

Resolution is due to hold an egm at the end of October to discuss the Friends merger, but insurance industry insiders expect the meeting to be redundant, one said.

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