Friends in need are friends indeed!!

Sorry for the corny title but I thought it was a good idea to get into the troubled affair of Friends Provident, which has recently unloaded investment manager Foreign and Colonial at a loss. The bid by Resolution for the British insurance company originally founded by Quakers seems just to be a bonanza for city firms. It seems an expensive way of getting Clive Cowdery et al on the Friends Provident board. I ploughed my way through the initial Friends Provident documentation as my wife has a few shares and an endowment policy with the company. Selling out for around 79 pence does not make much sense since the shareholding is a minimum from the original flotation so I suppose we will hang on and see what the Resolution deal brings. This could mean reduced service levels to endowment holders and poor prospects (to say the least) for
workers.
Money Marketing quotes a spokesman from the stockbrokers Charles Stanley, who said that "What we suspect has happened is that two groups of investors have put pressure on the Friends' board to do a deal, the first group being investors who wanted an exit from the stock and the other group being investors who have a stake in Resolution and realise that if Resolution is going to be successful in its consolidation project, then Friends had to be the first step." This quote is in the edition of August 20th.
Quite a few commentators say that it will be tricky for Resolution in terms of execution risk but I think there are a lot of insurance companies in the UK market place, which could be snapped up and make for easy cost-cutting.