Resolution says deals will come after cash injection

INSURANCE acquisition vehicle Resolution insisted its takeover strategy was on track as it announced a £180m boost to its war chest.

Clive Cowdery’s firm yesterday used its first set of results since absorbing Friends Provident to allay investors’ impatience for another deal, which has caused its share price to slide since November.

Describing Resolution’s demotion from the FTSE 100 earlier in the week as an “arithmetic event”, chief executive John Tiner said two more acquisitions would be made by early 2011.

He said: “Our conversations across the board suggest there are a number of organisations that are being very thoughtful about their UK businesses, and that gives us confidence.”

The £180m comes from its Friends Provident unit bringing Resolution’s cash pile to £480m. Pre-tax operating profit was £20m on an IFRS basis and £41m using market-consistent embedded value basis, in both cases up from a £1m loss last year.

Potential takeover targets include Lloyds Banking Group’s insurance arm and the British limbs of Aegon, Axa and Zurich. However, analysts warn ongoing weakness in Resolution’s share price will make a bid part-funded with paper difficult.

Shares in Resolution closed up 0.8 per cent to close at 78p yesterday.