Phoenix Group, the largest player in the UK’s
closed life insurance book sector, has ended speculation in the
media by confirming that it has received a number of approaches
from potential bidders for the company.
Among suitors with which Phoenix Group’s board
has held discussions is Resolution – a London-based,
Guernsey-incorporated, life insurance company established in
December 2008 by arch-acquisitor Clive Cowdery.
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In its statement, Phoenix Group noted that the
discussions with Resolution had proved fruitless.
According to a report in UK newspaper The
Sunday Times, Resolution had put an offer for Phoenix Group of
about £1.2bn ($1.7bn) on the table.
Had Resolution’s bid for Phoenix Group
succeeded, it would have arguably been Cowdery’s ultimate coup.
Phoenix Group was formerly Resolution Plc, a company Cowdery formed
in 2003 as a specialist in closed life books. Resolution Plc was
the subject of a bid by insurance company consolidator Pearl Group
in 2007.
Following an unsuccessful counter-bid by
Standard Life, Pearl Group succeeded in acquiring Resolution Plc in
May 2008 for £5bn. The name Phoenix Group was adopted in 2010.
Phoenix Group noted that it remains engaged with other companies
including UK-based CVC Capital Partners, one of the world’s
five-largest private equity firms.
Commenting on the approaches Phoenix Group has
received, the company’s chairman Ron Sandler said in a statement:
“The Board is obliged to evaluate any proposals that are received.”
He stressed that Phoenix Group’s board believes that the company
has “robust and predictable long-term cash flows”, is in a strong
position to “deliver substantial value” and has a “compelling
business model”.
In the eight months to November 2011, Phoenix
Group generated cash of £603m and anticipates generating cash of
between £750m and £850m in the full year. The company reported
total assets under management of £68.5bn at the end of June
2011.
