Resolution poised to back Pearl takeover

Click to follow
The Independent Online

Resolution, the insurance company that has been at the centre of a protracted takeover battle, has begun a final round of talks with Pearl, the only suitor remaining in the chase for the company.

Resolution is almost certain to recommend a 720p-a-share cash bid from Pearl to its shareholders following the decision by Standard Life at the weekend to pull out of the battle. However, the insurer believes it may be able to persuade Pearl to raise its offer one more time in order to secure the recommendation.

Resolution's board will not make a final decision on whether to back Pearl's offer for several days, with negotiations about the price and the structure of the deal ongoing. However, a deal is now almost inevitable, according to analysts. Trevor Moss, an insurance analyst at MF Global Securities, said: "We expect that Resolution will recommend this offer once the two companies have tied up a number of loose ends on the structure – in effect, this saga is over."

Resolution said yesterday that its chairman and founder, Clive Cowdery, would leave the company if the Pearl takeover went ahead. Mr Cowdery has built the company from scratch over the past four years, but is a fierce business rival of Hugh Osmond, chairman of Pearl. "Clive's plans for the future are very developed, though he will not be making them public until Resolution's future is resolved," a company spokesman said.

The company would not be drawn on the future of the chief executive, Mike Biggs, who has been linked with a role at Friends Provident, the insurer with which Resolution had at one stage this year planned to merge.

Pearl has increased its stake in Resolution to almost 26 per cent, having bought 2 million shares in the past few days. The company was already Resolution's largest shareholder.

Shares in Resolution closed down 17p at 706p. Standard Life rose 6.5 per cent to 259.5p.

Comments