Insurance tycoon Clive Cowdery, whose recent acquisitions have included Friends Provident and parts of Axa UK, has failed with an attempt to land the UK’s biggest owner of “zombie” insurance funds.
Mr Cowdery’s Resolution insurance conglomerate confirmed Sunday newspaper speculation linking it to a possible acquisition of Phoenix Group, but added that the talks with Phoenix and its lending banks have now terminated.
Phoenix has more than six million policyholders for whom it manages £68.5bn of so-called “zombie” funds. They relate to old life assurance and pension policies sold by household names such as National Provident, London Life and Scottish Mutual.
The reported price tag of £1.2bn would have ranked as one of the biggest in Britain’s financial services industry since the credit crunch in 2007.
It would also have allowed Mr Cowdery to buy back his old Resolution Life business, which was snapped up by Pearl – as Phoenix Group was then known – for almost £5bn in 2007.
According to the Sunday Times, Mr Cowdery’s interest in Phoenix faced competition from insurance giant Swiss Re and private equity firm CVC.
In a statement, Resolution said: “Resolution notes recent press speculation and confirms that, whilst it did investigate the possible acquisition of Phoenix Group Holdings with both Phoenix and its lending banks, these talks have terminated.”
It added: “Any acquisition must have a strong financial case and enhance returns to shareholders. The hurdle to executing any particular transaction is therefore high.”
Following the sale of the first Resolution Life business, Mr Cowdery raised a new fund with cash from his old backers before staging a takeover of struggling Friends Provident, along with Bupa’s life and protection unit and Axa UK life.
However, Resolution said earlier this year it would begin to return cash to shareholders because there were no other acquisition opportunities available.
Today’s reported offer price would have valued Phoenix at close to 700p a share, a 40% premium to the current level. It is listed in the FTSE 250 Index following its rebranding from Pearl last year.