The Wall Street Journal-20080122-Flowers May Buy Friends Provident
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Flowers May Buy Friends Provident
LONDON -- Private-equity company J.C. Flowers & Co. said it is considering acquiring British insurer Friends Provident PLC in a deal that could be valued at about GBP 4 billion ($7.8 billion).
J.C. Flowers, which also said an entity it advises has acquired a stake of about 2.7% in Friends, said it intends to approach the insurer's board "with a view to developing a proposal that will deliver value for Friends Provident's shareholders."
Friends Provident's shares rose 3.6% to 158 pence ($3.09) as the broader London market fell. The insurer has a market capitalization of about GBP 3.69 billion.
Friends Provident couldn't be reached for comment.The future of Friends Provident, one of the United Kingdom's smaller life insurers, has looked uncertain since it failed to push through an GBP 8.8 billion merger in October with Resolution PLC, a consolidator of closed life-insurance funds, which no longer write new business. The British insurer, which is advised by Goldman Sachs Group Inc. and J.P. Morgan Cazenove, plans to announce results of a review by month's end.
New York-based J.C. Flowers, headed by J. Christopher Flowers, had looked at Friends Provident last summer. Flowers was one of the rejected bidders for U.K. mortgage lender Northern Rock PLC.
Analysts said the renewed Flowers approach confirmed Friends Provident as a sellable asset. "It's easy for a buyer to break up the company and sell off its various businesses," KBW analyst Steven Haywood said.
Friends Provident holds a 53% stake in F&C Asset Management, owns the Lombard business, which focuses on wealthy people, and has protection and group-pension franchises and international operations, Mr. Haywood added.
The insurer recently froze its GBP 1.2 billion flagship property funds after a rush of redemptions threatened to force it to sell assets at fire-sale prices.
