Life insurer Friends Provident today recommended a £1.86 billion takeover offer by investment firm Resolution.

The tycoon Clive Cowdery was on the brink of winning control of Friends Provident last night as the 177-year-old life insurance companyre-opened talks over a renewed takeover proposal which valued the company at around £1.86bn.

Prudential, the life insurer soon to be lead by Tidjane Thiam, is expected to announce a 6p dividend to shareholders this week.

Standard Life revealed a sharp drop in annual profits yesterday as the recession hit its saving business, but confounded fears about a deterioration of its capital position.

Resolution, the investment vehicle run by entrepreneur Clive Cowdery, could reach agreement with Friends Provident's board over a takeover of the insurer as early as this week. However, it may face difficulties if it tries to buy the insurance assets of the state-supported Lloyds Banking Group.

Some of the biggest names in UK financial services feature in a list of the worst performing pension funds compiled by money analysis website howmuchdoineedtoretire.co.uk. Abbey, Friends Provident, Scottish Life and Clerical Medical occupy the bottom four places when it comes to pension fund performance over the past 10 years, the website said.

Clive Cowdery's Resolution wants to galvanise Friends Provident shareholders into pushing the life insurer into a deal with his company.

The insurer Friends Provident has rejected a revised takeover proposal by the insurance tycoon Clive Cowdery's investment vehicle Resolution, citing "significant flaws", particularly over structural and corporate governance concerns.

Bunzl fell back despite a firm market trend last night, after analysts at Bank of America Merrill Lynch switched their stance on the stock to "neutral" from "buy".