CLIVE Cowdery’s Resolution was put on high alert yesterday after Lloyds Banking Group signalled it may be forced by the European Commission to dispose of assets, reopening the possibility of the buyout vehicle purchasing part or all of Scottish Widows and Clerical Medical.<br /><br />A source familiar with the situation said yesterday that Resolution could be prepared to revive its interest in Clerical Medical and Scottish Widows in the light of Lloyds’ belief that it may be forced to shrink its balance sheet to comply with competition law.<br /><br />“It will be interesting to see if this statement from Lloyds changes anything,” he said. “Resolution is looking at a lot of things and would certainly consider anything in the asset management area.”<br /><br />He added that Resolution was prepared to raise £4bn-£5bn for the right acquisition, or even more in certain circumstances. Resolution has previously looked at Clerical Medical and Scottish Widows, valued at around £10bn, before abandoning the plan due to an FSA probe into the firm’s executives.<br /><br />Cowdery and four directors of his previous firm, Resolution plc, were investigated over “certain actions” relating to the £5bn sale of the business to Pearl Assurance last year.<br /><br />But with Cowdery and fellow executives having been cleared of any wrongdoing earlier this month, the company is ready to press ahead with its acquisitions drive.<br /><br />Lloyds said yesterday that it could be forced to “divest or exit” core businesses in order to secure EC approval for its participation in government support programmes such as the asset protection scheme (APS). The possibility was raised in the bank’s prospectus accompanying its £4bn share placing.<br /><br />But some analysts were yesterday sceptical about the likelihood of the EC forcing Lloyds to make disposals, pointing out that plenty of European banks had received state aid and were unlikely to have such harsh conditions imposed on them.<br /><br />Lloyds also raised the prospect that it may have to renegotiate the terms of its participation in the APS in the light of its prediction of a 50 per cent rise in corporate impairment this year, upping the pressure on chief executive Eric Daniels. The bank said “negotiations with HM Treasury to finalise the terms of the group’s proposed participation are continuing and, although this is not currently expected, may result in changes to the terms announced”.<br /><br />Lloyds shares fell eight per cent to 70p yesterday after adjusting to take account of its £4bn placing and open offer.