26th Oct 2007 13:13
Friends Provident PLC26 October 2007 For immediate release 26 October 2007 Friends Provident plc Termination of Merger Agreement The Board of Friends Provident plc ("Friends Provident" or the "Group") notesthe announcement from Resolution Plc ("Resolution") that it has recommended theoffer from Standard Life plc. As a consequence the merger agreement betweenResolution and Friends Provident has been terminated. The Board continues tobelieve that the combination of Friends Provident and Resolution would haveprovided an excellent opportunity to create significant value for theshareholders of both companies. As a result of the termination of the mergeragreement, the merger will not proceed and, under the terms of the agreement,Friends Provident will receive an inducement fee of approximately £49 millionpayable by Resolution. The Board of Friends Provident continues to have confidence in the Group'sstrategic objectives and prospects and is committed to maximising shareholdervalue. Friends Provident's UK life and pensions business continues to buildstrong market positions and has delivered a track record of growth. The Board isfocused on its objective of profitable growth, and will explore initiatives tostrengthen further the business's position in this core market. F&C AssetManagement is making progress with its three year strategic plan and the Group'sinternational businesses, FPI and Lombard, continue to provide shareholders withthe prospects of excellent growth and attractive returns. Friends Provident is strongly capitalised, with approximately £1 billion ofsurplus capital, and has sufficient cash resources for its near termrequirements. The Group already has in place undrawn committed borrowingfacilities of £500 million with an unexpired term of over three years. Inaddition, the Group's convertible bond will be converted into equity in December2007. In the absence of unforeseen events, the Group's net cash strain isanticipated to be eliminated in three to four years and would see an aggregatecash requirement of up to £400 million over that period. As stated at itsinterim results, Friends Provident's standalone plan to fund this requirementwas to raise lower tier 2 debt of up to £500 million. In light of thetermination of the Merger, Friends Provident will reinstate its debt fundingplans. As there is no near term requirement for this funding, the debt will beraised as and when market conditions provide the right opportunity. The Groupdoes not require the issuance of new equity to fund its growth plans. Enquiries: Friends Provident+44 (0)845 641 7832Nick BoakesChris Ford Finsbury+44 (0)20 7251 3801Vanessa NeillAlex Simmons Certain statements contained in this announcement constitute 'forward-lookingstatements'. Such forward-looking statements involve risks, uncertainties andother factors, which may cause the actual results, performance or achievements,from time to time, of Friends Provident plc, its subsidiaries and subsidiaryundertakings or industry results to be materially different from any futureresults, performance or achievements expressed or implied by such forward-lookingstatements. Such risks, uncertainties and other factors include, among others,adverse changes to laws or regulations; risks in respect of taxation; unforeseenliabilities from product reviews; asset shortfalls against product liabilities;changes in the general economic environment; levels and trends in mortality,morbidity and persistency; restrictions on access to product distributionchannels; increased competition; and the ability to attract and retainpersonnel. These forwardlooking statements are made only as at the date of thisannouncement and, save where required in order to comply with the Listing Rules,there is no obligation on Friends Provident plc to update such forward-lookingstatements. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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