Friends Provident suitor sets bid deadline

Private equity firm JC Flowers today threatened to walk away from its £3.5bn (€4.3bn) takeover approach for Friends Provident unless the board of the life and pensions firm opens talks by the end of the week.

Friends had been holding out for an improvement on its suitor’s 150p a share approach, but Flowers’ ultimatum came with a refusal to lift its potential offer.

The private equity firm said: “Despite several attempts by JC Flowers to engage the board of Friends Provident in discussions over several months, Friends Provident has not been willing to do so.”

Shares in Friends fell more than 7% after JC Flowers’ statement as hopes of a possible deal were knocked.

Flowers added: ``In the event that the board of Friends Provident does not enter into discussions with JC Flowers prior to the close of business on Friday, April 18, it is JC Flowers' intention to formally withdraw its proposal.''

The private equity firm, run by former Goldman Sachs partner Chris Flowers, has built up a stake in Friends and reportedly looked at buying the business almost a year ago.

Flowers said last week that its approach “represents a sound basis for entering into discussions” with its target, although it is less than the 175p-a-share the private equity firm was said to be considering in January.

Friends has seen its share price tumble in recent months after the collapse of a merger with closed life fund manager Resolution, a deal which was gatecrashed by rival suitor Pearl.

The demise of the merger with Resolution raised concerns that Friends would not have enough financing to fund expansion.

Bosses pledged a renewed focus on protection and group pensions last month as they announced plans to down-size following a strategic review. The overhaul will also see its asset management arm F&C and other non-core businesses offloaded.

The group has hired Trevor Matthews from Standard Life as chief executive in a bid to turn around its fortunes, but he will not be able to start until the summer.