There will now be two weeks of secret bilateral bargaining between the bidders, the ScotAm management and their financial advisers SG Warburg. ScotAm will then take a further two weeks before recommending the winning bid to policy-holders.
Jock Birney, managing director of Warburg's corporate finance division, said last night that no details of the individual offers would be released without the consent of the bidder.
Discussions over the next fortnight will concentrate on obtaining the maximum value for policyholders. This could revolve around the relative merits of cash, shares, or additional bonuses added to the ultimate value of the policies. Preserving jobs in Scotland, however, will be only a secondary consideration.
The offers differed significantly in detail, but headline figures were misleading, Warburg said yesterday. Cash in hand is not the same as a loan.
Abbey National's initial offer made in January consisted of pounds 400m in cash or shares for Scot Am's 1.1 million policyholders plus anything from pounds 700m to pounds 1bn for the embedded value of the policies. Abbey National said it was willing to increase its sighting offer but it is still not known if it has done so.
Prudential's last public statement on its offer promised pounds 400m in cash and pounds 400m in bonuses for policyholders, plus a loan of pounds 1.1bn from Pru's life fund into the ScotAm fund.
Prudential also promises to make ScotAm the focus of its operations, selling policies through independent financial advisers.