Resolution Withdraws Support for Standard Life Bid

Resolution Plc, the target of the biggest takeover fight for a U.K. insurer since 2000, dropped its support for an offer by Standard Life Plc after rival Pearl Group Ltd. made a higher bid.

Pearl increased its all-cash offer for the company to 4.93 billion pounds ($10.2 billion), or 720 pence a share, on Oct. 26 and raised it stake in Resolution to 24 percent from 16.5 percent. Resolution withdrew its backing for Standard Life's cash-and-stock bid of 713.6 pence a share that needs the approval of 75 percent of Resolution's shareholders, the company said in a statement today.

``Pearl seems to hold most the cards at present,'' Sanford C. Bernstein & Co. analyst Bruno Paulson said in an e-mailed note to clients today. Standard Life may be able to make its offer all cash and stymie Pearl by selling its Canadian operation that is valued at about 1 billion pounds, Paulson said. He rates Standard Life shares ``outperform.''

Standard Life is considering restructuring its bid for Resolution to reduce the number of shareholders needed to approve the offer for what would be the U.K.'s biggest insurance takeover since CGU bought Norwich Union Plc for 7.4 billion pounds in 2000 to create Aviva Plc, Britain's largest insurer.

microcapreview.org