Friends rejects JC Flowers approach

FriendsProvident.jpg

Friends Provident has rejected a 150 pence cash offer proposal from private equity group JC Flowers valuing the life assurer at £3.5 billion.

JC Flowers' proposal, which was made last Thursday, indicated the offer price would be reduced in the event Friends Provident paid shareholders the declared 2007 final dividend of 5.3 pence per share.

Friends said it has informed JC Flowers its proposal 'significantly undervalues Friends Provident and its prospects and does not represent a basis for discussion'. Shares rose 3%, or 4p in early trade to 124 pence.

In a statement, the group said it remains focused on the implementation of its strategic review announced on 31 January and will update shareholders on progress at its 2008 interim results.

A source close to Friends indicated the board is planning to consult with major shareholders today. JC Flowers made a 175 pence per share approach to Friends in January.

Friends is understood to have asked the Takeover Panel to issue a 'put up or shut up' notice to JC Flowers prior to last week's approach. People familiar with the situation continue to believe the Panel will enforce a deadline 'sooner rather than later'.

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