Rival insurers set to join forces to thwart Resolution-Friends Provident deal

Pearl Assurance, the life company stalking fellow insurer Resolution, is expected to team up with Standard Life to make a joint bid for the group.

Resolution is tomorrow set to provide investors with an offer document for its proposed nil-premium merger with Friends Provident. But analysts think Pearl, headed by Hugh Osmond, will gatecrash the party with a higher offer supported by Standard Life. Pearl wants to get its hands on Resolution's closed funds, while Standard Life is poised to clean up the remainder of its business, including Scottish Provident, in a deal that could be worth 660p a share.

Pearl is likely to submit a bid by the middle of this week, shortly after Resolution publishes its offer document. But if Pearl teams up with Standard Life, it will significantly reduce the chances of a bidding war.

Clive Cowdrey, Resolution's chairman, has recommended the Friends Provident tie-up. Resolution's shares closed on Friday at 694.5p, unchanged on the day.