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August 11, 2009

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Friends Provident meets suitor Resolution

BRITISH life insurer Friends Provident said yesterday it had agreed to talks with suitor Resolution after receiving a revised takeover offer valuing it at almost 1.9 billion pounds (US$3.2 billion).

That sent stock in Britain's sixth-largest life insurer up 7.6 percent in early trading to 75.45 pence, still below the 79.4 pence-a-share level of Resolution's mostly share offer, a 13.3 percent premium to last Friday's closing price.

In a statement, Friends Provident said the proposal had been sufficiently improved to justify entering into discussions with the Guernsey-based bid vehicle, but said there was still no certainty an offer would be made.

The two sides broke off talks in July, marking a setback for Resolution, which raised 600 million pounds in a stock market listing last December to buy and restructure life insurers and asset managers. Friends is its first formal bid target.

Friends said the fresh offer was an exchange ratio of 0.9 Resolution shares for each Friends shares and also included a partial cash alternative for no more than 500 million pounds.

That compares with an earlier proposal under which Friends shareholders would have received 0.82 Resolution shares for every Friends share plus the cash alternative.


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