Resolution, the closed life fund specialist chaired by Clive Cowdery, says it is in talks about a possible takeover but doesn’t say with whom. The Sunday Times said talks had been held with Prudential and Standard Life. Resolution seems to have been pretty quick to get a statement out: they look keen to get an auction going. This business, which has only been around for five minutes, is valued at £4.5bn this morning, with its shares up 4.5 per cent. Chris Hughes’s Lombard note a couple of weeks ago suggested it was getting harder for Resolution to buy up assets and that it may become a target itself.
Analysts at Cazenove also look smart. Two months ago, James Pearce wrote: “We believe rather than a conventional acquisition, there is a chance that Cowdery’s next move could even be to reverse Resolution into the back book of an open life office. That would offer his own shareholders an attractive exit price and offer the buyer a strong team to manage the run-off of the enlarged back book more effectively and profitably.” Today, FT Alphaville suggests that Cowdery put his business together with Scottish Widows and float the enlarged business off from Lloyds TSB.
A busy Monday morning also sees confirmation that Texas Pacific Group and First Reserve Corporation have approached Amec about a takeover, but have been rebuffed. This may explain why everyone got so excited earlier this month when Downer EDI of Australia said it had made a takeover approach to Amec but failed to agree a price. The Texas/First Reserve approach sounds like it is still quite early: they say Amec’s board has “declined to provide access”. Amec says the approach, though to have been at around the 450p a share mark, “significantly undervalued” the company.
Marshall Wace is floating off a €1bn fund that will invest using the hedge fund company’s Tops strategy, which stands for trade optimised portfolio system. This strategy, which is based on using all the available investment research out there, has attracted controversy but was cleared by the FSA a few weeks ago. We’ll explain it properly in tomorrow’s paper and tell you why the fund is being floated on Euronext rather than in London, just as permanent capital vehicles from private equity firms have been. FT Alphaville says Marshall Wace’s Tops strategy has produced returns of more than 20 per cent, before management fees, over the past five years.
I’m sure we’ll have more later on NTL’s attempt to take over ITV. RTL’s chief executive, Gerhard Zeiler told a media conference in London that “RTL Group is not in talks with ITV at the moment.” Note: “at the moment”.
Disaster at Tadpole Technology. The shares halved after it said its contract with Ordnance Survey would be suspended.
Rumour of the Day: Talk of a US counterbid for Scottish Power to rival Iberdrola has lifted the stock a bit.