Pearl-Resolution deal hits fresh snags

Doubts increased yesterday about the planned takeover of Resolution, the closed life fund operator, by its rival Pearl as the deal hit a fresh delay.

Resolution said yesterday that the deal was unlikely to complete until after mid-March because Pearl had asked for more information. The deal deadline was put back by three weeks earlier this month when Pearl asked Resolution for more information for its discussions with the regulator on distributing capital from Resolution's life companies.

The deal was first postponed in January over legal issues.

Resolution said talks were continuing, and it was continuing to provide more information. "Resolution is committed to ensuring that the acquisition is implemented as planned," the insurer added.

The companies fought a bitter battle last year as Pearl sought to gatecrash Resolution's agreed merger with Friends Provident. Pearl eventually saw off a rival offer from Standard Life to get agreement from Resolution.

The extra uncertainty hit Resolution's shares, which closed down 2.5 per cent at 663p, well below Pearl's cash offer of 720p a share, agreed three months ago.

Pearl has not yet submitted its change of control application to the Financial Services Authority. The change of control process can take up to three months.

Pearl's Hugh Osmond and Clive Cowdery, chairman of Resolution, competed to buy up closed life funds to combine them and get economies of scale.