Pearl closes in on Resolution after third-party talks

Pearl Group, the insurance group stalking Resolution, plans to offload more than £1bn of its rival's funds should it proceed with a £4.5bn takeover.

It is believed that Pearl has held talks with several insurance groups, including Standard Life, about a side-deal that would see all of Resolution's non-closed funds off-loaded to a third party.

The existence of talks between Pearl, headed by Hugh Osmond, and some of Europe's largest insurance groups will heighten expectations that he is poised to make a knock-out bid for Resolution.

It is understood that Resolution held talks with Standard Life last year over a possible deal to offload some of its funds, but negotiations broke down. As well as Standard Life, the likes of Swiss Re, Zurich and others would also be keen to snap up unwanted assets.

Resolution chairman Clive Cowdrey wants his company to merge with Friends Provident. However, that deal is opposed by Pearl, which has built up a 16.8 per cent stake in Resolution.

Friends Provident's share price has fallen over the last two weeks while Resolution's have risen. Analysts have said that this is because the market is now expecting a successful Pearl bid for Resolution as the most likely outcome of the talks.