Friends Life Group Ltd made a statement today, announcing its intentions to return cash to its shareholders, after Blackstone Group LP reached an agreement to acquire its European wealth-management division in a deal valued at about 356 million pounds (610 million dollars).
The Chief Executive Officer of Friends Life Group Ltd – Mr. Andy Briggs commented on the situation in a telephone interview, which was cited by Bloomberg: “There weren’t any synergistic benefits from keeping Lombard. We’re not sitting here thinking that there are further steps we need to take. We are very confident that we have a very strong capital base even post the buyback.”
According to the companys statement, the proceeds gained from the sale are intended to be used for funding a cash return to Friends Lifes shareholders. The U.K.-based company also plans to use part of the proceeds in order to improve the insurers dividend cover. About 261 million pounds are planned to be returned to shareholders through a share buyback.
Friends Life Group Ltd revealed today that Lombard units sale includes a deferred payment that amounts to 56 million pounds in the form of a vendor loan note and an interest equivalent estimated at 7 million pounds.
The announcement of the U.K. insurer comes at a time when the founder of Friends Life Group Ltd Mr. Clive Cowdery has concentrated on persuading the companys board to consider further divestment of assets. The CEO Mr. Briggs, when asked if it is likely for Friends Provident International to become part of the group in short term, he answered for the Financial Times: “I don’t want to speculate on what might or might not happen.”
Friends Life Group Ltd was adding 1.5% to trade at 325.00 pence per share by 13:21 GMT, marking a one year change of +5.52%. According to the information published on the Financial Times, the 16 analysts offering 12-month price targets for Friends Life Group Ltd have a median target of 327.50, with a high estimate of 390.00 and a low estimate of 280.00. The median estimate represents a 2.28% increase from the last price of 320.20.
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