Resolution stumps up £500m for its investors
- Select a language for the TTS:
- UK English Female
- UK English Male
- US English Female
- US English Male
- Australian Female
- Australian Male
- Language selected: (auto detect) - EN
Play all audios:
Shares in the insurance buyout firm rose 8½p to 308¼p after it promised to start a £250million share buy back programme today and said it would return a further £250million to shareholders
in the first half of next year, subject to the company achieving £235million of capital savings from bringing together its acquisitions. It hinted more money could eventually be returned,
with analysts at Barclays Capital suggesting the sum could reach £1.2billion, while those at Investec saying the next phase of the business is to create an “exemplary cash cow”. The
company created Friends Life, sponsor of cricket’s county Twenty20, from Friends Provident, the UK arm of Axa and parts of Bupa Health. Chief executive John Tiner said although the company
would consider further acquisitions in the UK, it would not pursue any deal that would involve imperilling the promised return to investors raising new funds. It sees no deals in the
short-to-medium term. Investors have been pushing the company to return at least part of its £1billion cash pile. Resolution said once the initial £250million is returned, it needs a further
£350million to pay dividends and repay debt, and £400million as a buffer. Resolution is planning to sell or list Friends Life by 2014.