Cowdery’s buyout fund is dead man walking but shares still worth a look
WHEN Clive Cowdery returned with the second incarnation of Resolution, his life insurance consolidation vehicle, he had ambitions to match the firm’s moniker.
To be frank, he hasn’t resolved very much and today’s £250m buyback suggests he doesn’t plan to either. February’s “pause” on new acquisitions is now looking like a final stop. The zombie fund label couldn’t be more apt.
Still, shareholders can comfort themselves with the £500m of cash that will be returned over the next 12 months (a second tranche of £250m will come in the first half of 2012).
There could be more share buybacks or special dividends to come. Analysts at Barclays Capital reckon Resolution will return a further £500m in 2012, with even more should Resolution start disposing of its assets.
Assuming that buybacks hit £1.2bn and Resolution sells Lombard and Friends Provident, BarCap has a 418p upside valuation.
Cowdery might have given up on his grand plan but the shares still haven’t had their day.
david.crow@cityam.com