Life and pensions group Friends Provident is to cut around 600 jobs by 2009 in a £60 million cost-saving exercise.

The jobs will go throughout its core business in the UK and internationally.

The company confirmed that it may sell investment subsidiary F&C Asset Management, which is estimated to be worth £500 million.

Friends Provides named Standard Life's UK boss Trevor Matthews as its new chief executive earlier this week. He will oversee a recovery programme for the business which is to take a £160 million hit to earnings as more customers cash in their policies early.

Pre-tax profit for 2007 will be around £300 million, against £509 million a year earlier, the company said. This will be impacted further by accounting changes.

Shares in the company fell 7% to 143.7p.

US private equity firm JC Flowers is expected to make a bid for Friends Provident which has become vulnerable since failing to merge with life insurer Resolution last year.

Stockbroker Landsbanki said potential buyers for F&C may be put off by the need to integrate 'fragmented' systems, despite the chance to acquire £100 billion of assets under management in 'one fell swoop'.

Analyst Samir Shah said: 'Aberdeen AM has indicated that the trauma of the Deutsche AM fixed income integration means it is unlikely to bid for F&C’s as a whole.'

Shah believes that private equity firms including Hellman & Friedman and TA Associates, which already have stakes in Gartmore and Jupiter respectively, may be open to bidding if sufficient cost synergies could be obtained.

'However, the uncertainty surrounding the stickiness of related-party management contracts may prove a stumbling block. We are also unsure of Dawney Day’s intentions, but with a 17.6% stake in the business, it may be looking for a more strategic role.'