No Resolution for Phoenix in buyout talks

THE collapse of talks between insurance takeover specialist Resolution and rival Phoenix Group has cleared the way for a rival bid from buyout firm CVC Capital or Swiss Re.

CVC has opened talks over a deal to buy all or part of Phoenix, it emerged yesterday, as Resolution broke off negotiations over a deal.

City A.M. understands the two parties could not agree on the price, with Resolution unwilling to pay £1.2bn for the entire business, which would represent a 40 per cent premium to Phoenix’s closing price on Friday. The group, set up by Clive Cowdery to buy weak life insurers, will now look at buying smaller firms to go alongside Friends Provident.

Resolution declined to comment beyond a statement saying talks with Phoenix “have now terminated”.

A deal would have brought back under Cowdery’s control a group of closed life funds he sold for nearly £5bn in 2007 to Pearl, an earlier incarnation of Phoenix backed by financier Hugh Osmond.

Phoenix, created from a restructuring of Pearl last year, remains burdened by £2bn in debt incurred to finance that deal but is thought to have received 10 recent approaches. Chairman Ron Sandler said the board would look at any proposals.

Swiss Re, whose Admin Re unit specialises in buying insurers that are closed to new customers, is also thought to have approached Phoenix but refused to provide confirmation.