Friends expected Flowers to increase offer

Sir Adrian Montague, executive chairman of UK fund manager and life assurer Friends Provident, has spoken for the first time about his complete surprise at the withdrawal by private equity investor JC Flowers of its 150p per share, £3.5bn offer earlier in April.

Montague was speaking on 29 April at the announcement of Friends Provident’s first quarter results showing an 11% increase in sales, which he described as “satisfactory”

Montague explained that JC Flowers’ original bid had been well below what the board expected, and that the “zone” (around 175p per share) to begin serious talks was well known. Montague said: “You could have knocked me down with a feather when he did withdraw.”

Friends Provident, meanwhile, is continuing the process of disposing of its wealth management divisions: Pantheon Financial, where a decision is expected in four to six weeks; Lombard, with first round bids from around 15 parties to be submitted in May; and the possible sale of the company’s 52pc stake in F&C, which has seen “strong interest”,

Montague states that most of the interest is from trade buyers.