Resolution plans cash call to fund AXA deal

Acquisitions vehicle Resolution said it would fund its planned takeover
of French insurer AXA’s British life operations by raising £2bn
($2.91bn) in a rights issue.

The acquisition would cost a total
of £2.75bn, Resolution said, adding that it hoped to announce a deal by
the end of June.

The company, founded by insurance tycoon Clive
Cowdery, aims to buy and merge at least three British insurers or asset
managers before floating or selling the combined group in 2012.

Resolution confirmed that it was discussing a takeover of most of AXA’s
British operations in what would rank as its second acquisition after
the £1.8bn purchase of British life insurer Friends Provident last year.

“This acquisition would build strong momentum in Resolution’s
life assurance consolidation project, and provides a range of options
for further activity,” Resolution Chief Executive John Tiner said in a

Under the deal, AXA, Europe’s second-biggest
insurer, would sell its British protection, annuities and group pensions
business to Resolution, but would keep its wealth management and direct
protection operations in the UK.

“This potential transaction
does not call into question in any way the AXA Group’s continuing
long-term commitment to the UK market,” AXA said in a statement.

AXA said the disposal would result in a Ä1.4bn ($1.7bn) one-off
writedown in 2010, but would generate net cash proceeds of Ä1.7bn and
boost its capital strength.

Resolution said it had requested a
suspension of its shares as the deal would be classified as a reverse
takeover under stock market rules.


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