Resolution Life, the closed life book consolidator chaired by Sir Brian Williamson, moved in to try to break up Hugh Osmond's acquisition of the Pearl, NPI, National Provident and London Life funds yesterday, threatening to make a bid for the entire share capital of HHG, the funds' parent company.
HHG agreed to sell its closed life funds, which have assets of £26bn, to Mr Osmond, a leisure sector entrepreneur, for £1bn in December. Resolution took part in the original auction for the funds but lost out.
However, it emerged yesterday that the group has since made a renewed offer for the life funds and has made it clear that it would be willing, if necessary, to bid for the entire share capital of HHG, which includes the fund manager Henderson and the financial adviser Towry Law.
Shares in HHG ended the day up 8 per cent at a new high of 71p, giving the company a market value of almost £2bn.
HHG confirmed yesterday that it had received an informal approach from Resolution. A shareholders' extraordinary general meeting to approve Mr Osmond's acquisition is scheduled for 21 February. If HHG makes a higher offer for the life funds, or a bid for the whole group, the board will be obliged to consider it.
A spokeswoman for Mr Osmond said that as far as Sun Capital - Mr Osmond's company - was concerned, it was "business as usual".
In a statement Resolution confirmed it was considering making an offer but said talks were at a preliminary stage.
Clive Cowdery, Resolution's chief executive, was one of the first into the closed life book market, snapping up Royal & SunAlliance's closed funds for £850m last summer. He is believed to have been disappointed to have missed out on the HHG funds, which form one of the few large blocks of funds available.
Shares in Britannic, another closed life book consolidator, also shot up more than 3.5 per cent yesterday on speculation that Resolution may consider bidding for it.
If Resolution is successful in its bid for the entire HHG group, it is almost certain to sell the fund management business, Henderson, to a third party. Henderson, which has assets under management of about £70bn, would fetch up about £1bn.
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