British insurer Standard Life has made a mostly cash takeover bid for rival Resolution, valuing it at around 4.9 billion pounds ($10 billion), the two sides said on Thursday, confirming an earlier report.
Resolution said Standard has offered 517p in cash and 0.715 Standard Life shares per Resolution share -- roughly 717p a share at Wednesday's closing prices, and above Resolution's current price of around 708.5p at 1217 GMT.
Resolution said its board is expected to meet later on Thursday to consider the offer.
Standard Life's offer, set to be backed by Swiss Re with whom it has been in talks for some weeks, is expected to be conditional on a recommendation from Resolution's board.
We believe our proposal offers great value for Resolution and Standard Life shareholders, a Standard Life spokesman said.
We await a formal response from Resolution.
Standard Life shares were hit, however, by worries over the size of a share issue needed to fund the share portion of the bid. The stock was down 3.5 percent at 1217 GMT at 270p.
Suitors have been circling Resolution, which has focused on consolidating life assurance funds closed to new business, since it agreed to merge with rival Friends Provident in July.
Standard Life said last month it was considering a cash-and-shares offer, confirming later it was in talks with Swiss Re over a deal that would hand the Swiss giant some of Resolution's closed books in the event of a takeover.
Earlier on Thursday sources familiar with the matter had told Reuters the bid would be worth around 720p a share -- below weekend indications of an offer around 730p.
Resolution's other suitor is unlisted competitor Pearl, also the group's top investor after buying up shares and derivatives. Pearl has made two unsuccessful bids, with the latest 691p per share cash offer rejected by Resolution's board last Friday.
Resolution has repeatedly said the Friends deal is on track, with shareholders due to vote on Nov 5, but has also indicated it is open to offers that add more value for shareholders.
The Takeover Panel had set a deadline of 1600 GMT on Oct 25 for Resolution's suitors, Pearl and Standard Life, to either table formal bids or withdraw.