Mutual issue

12 November 2007 By Mike Verdin

First Friends Provident, now Standard Life, have lost out in the auction for the UK insurer. Failure has damaged both. Sure, they were never going to find rival bidder Hugh Osmond a pushover. But in biting off more than they could chew, they appear to be following a wellworn script for former mutuals.

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Standard Life said it would not raise its offer for Resolution and had given notice that it was walking away from a merger agreement with the rival UK insurer.

As a result, Standard Life does not expect its offer to be implemented, the company said.

The decision followed a fall in its share price, which valued its cashandshare bid for Resolution at 691p a share at closing prices on November 9. A rival allcash bid from Hugh Osmond values Resolution at 720p a share.

The immediate market reaction was to send Standard Life shares 7.8% higher to 262.75p.

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