US private equity firm JC Flowers has made a 175 pence per share informal offer for troubled UK insurer Friends Provident who is looking for offers above 200 pence a share.
JC Flowers' interest in Friends is believed to have been rekindled before Christmas, with the stake raising the prospect of renewed activity.
Potential offer
Rava Sinha, who runs the firm’s operations in Europe wrote to Friend’s Provident before Christmas in an attempt to open talks between the two firms.
Sources say that the private equity firm who specialise in financial services investments is unlikely to raise its offer which values the company at about £4.1 billion.
It recently pulled out of the bidding war for Northern Rock after failing to match the expectations of the government.
Strategic review
JC Flowers was thought to be interested in making an offer for Friends in May last year, possibly in partnership with AXA, the French insurer.
Flowers last week built up a 1.8 percent stake in Friends but is thought to be waiting for the outcome of a strategic review by the insurer - started after its failed £8.7 billion merger with Resolution - before deciding its next move.
The group is due to reveal the results of the review – which is being overseen by investment bank Goldman Sachs - on January 31, which could lead to a break-up of the business.
Chief executive
Friends is currently looking for a new chief executive after ousting Philip Moore following the collapse of the Resolution deal last November.
It is believed the group has approached Trevor Matthews, the head of Standard Life's UK retail business.
Other contenders include Les Owen, a former Axa executive, and Paul Thompson, former Resolution chief executive.
January 21, 2008
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