Standard Life and Swiss Re to join in battle for Resolution

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The Independent Online

Standard Life could announce the formation of an alliance as soon as today with Swiss Re to bid for Resolution, threatening to open up a three-way tugof- war for the closed life fund company.

The bidding partners are understood to be considering tablinganoffer worth up to 750p per share. That would be trump not onlya660poffer from Pearl, which Resolution rejected last week, but would also apply new pressure on the agreed £8bn merger of equals that Resolution first struck with Friends Provident in July.

Standard Life, which is understood to covet Resolution's Scottish Provident business, andSwiss Re, the world's largest reinsurance group and an active acquirer in the UK, are working against a tight timeline. Friends Provident and Resolution are to hold shareholder meetings on 5 November to allow their investors to vote on the combination. The companies hope to close the deal by 29 November.

Sources close to the situation expect the Takeover Panel to issue a "put up or shut up" demand to potential bidders this week. Under terms still being worked out by Standard Life andSwiss Re, the former would probably end up with Resolution's new business arm, as well as its distribution and asset management units. The latter would take its closed life "zombie" funds arm.

Meanwhile, Hugh Osmond, the head of Pearl, is expected to come back with a bid that offers more than the 660p he first proposed last week.Hehas already built up a 16 per cent stake in Resolution,which is headed by his rival Clive Cowdery. Friends Provident has said in the past that if it fails to merge with Resolution, it would have to raise as much as £600m in the debt market to fund its medium-term growth plans.

It is understood that if it fails to win the bidding war, it could wait until the new year to go into the market to raise the funds, when debt market conditions are likely to have improved.

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