Phoenix Group has confirmed it is in talks about a possible takeover of Cinven-owned Guardian Financial Services.
This comes after Sky News reported Phoenix Group had approached its privately owned rival about a £1bn-plus takeover. The consolidator of closed life assurance funds was in tentative talks with Cinven about a deal that would create a £70bn asset manager.
Phoenix bosses said: “As stated at the time of the 2015 interim results on 20 August 2015, Phoenix believes there are a number of potential acquisition and consolidation opportunities in the UK closed life sector and has been reviewing those options within the framework of its existing commitment to stakeholders.
“Having secured an investment grade rating earlier this year, the group is well positioned to take advantage of the consolidation opportunities in its sector.”
The statement added that discussions remain on a non-exclusive basis, meaning that there can be no certainty they will lead to any transaction.
Last month Phoenix Group reported it was “on track” to achieve its cash generation targets of £200m to £250m this year, following previous concerns that the looming Solvency II capital requirements were likely to hit cash generation this year.
The group’s results for the first half of this year revealed that it achieved £110m in cash generation during the first six months of this year.
Annual results, published in March, expressed uncertainty as to whether Phoenix would be able to meet the cash generation range target of £200m to £250m “due to the retention of capital in the life companies in the short term”.
However, the latest results said that 2015 is a transitional year to the new Solvency II capital regime and cash generation targets incorporate assumptions about how the final regulations are likely to be implemented.
“Against a full year cash generation target of £200m to £250m, £110m was delivered in the first half of the year, taking the group half way towards meeting the full year target.”
emma.hughes@ft.com
