INSURANCE consolidation vehicle Resolution said its shareholders were ready to stump up £3bn to fund another acquisition as it released its first quarter numbers yesterday.
Founder Clive Cowdery’s team held a round of meetings with major investors including Aviva and Legal & General in March, at which they reaffirmed their willingness to put up three to five times the £600m raised in 2008’s flotation.
Chief executive John Tiner said: “That’s why not only do we feel confident about the deal flow on the other side, but we feel very confident about our ability to finance a substantial transaction as well.”
Since it paid £1.9bn for Friends Provident last year pressure has been steadily building on Resolution to do another deal. Its share price has fallen 27 per cent to 70.8p since November as the market has become doubtful Cowdery can pull off two further buyouts before spring 2011.
Resolution is understood to have drawn up a shortlist of 25 potential targets, of which it is looking at 10 closely. Prudential’s UK arm will be of interest if its $35.5bn (£23.6bn) pursuit of Asian insurer AIA falls apart, but in the short term analysts said market noise around Prudential would tie up institutional investors’ attention and capital.
The news came as Resolution said sales at Friends Provident rose nearly 22 per cent to £178m, helped by strong new business from Asia. Group life and pensions sales were up seven per cent to £117.5m.