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Aviva sale of Tenet stake ‘pure fantasy’: O’Brien

Aviva sale of Tenet stake ‘pure fantasy’: O’Brien

The managing director of Tenet has said rumours that Aviva could sell its stake in his network are “pure fantasy”.

Mike O’Brien was speaking after it was reported Aviva was planning on selling its stake in the network – which, after its merger with Friends Life, stands at 47 per cent.

He said: “As far as we are aware it is nowhere near the mark. It is pure fantasy.

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“Why would they wish to dispose of Tenet? It is a profitable business, it is growing and it has a good regulatory record. Financially, it is in an extremely strong position.

“We cannot second guess what their ultimate strategy will be in a number of years’ time but as far as we are concerned it is business as usual.”

Before their merger Aviva and Friends Life were both shareholders in Tenet and the merged company is now the biggest single shareholder - though is still short of being the majority owner.

When asked about this, Aviva refused to confirm or deny whether it would be selling its stake, claiming that it did not comment on speculation.

A spokesman said: “Aviva is committed to ensuring that customers have access to full regulated advice when they need it.”

Aegon UK and Standard Life are the two other institutional shareholders in Tenet, with approximately 23 per cent each.

The remaining shares are owned by individual shareholders.

Earlier this year Sesame Bankhall Group, owned by Friends Life, announced its decision to no longer offer a network option for investment and pension appointed representatives following a strategic review.

Background box

In February, the Tenet Shareholders Action Group, which has a 6 per cent stake in Tenet, said it was looking to capitalise on renewed provider direct distribution interest by playing other insurance company shareholders off against one another to sell the stake.

Earlier in the year it posted a 6 per cent increase in headline turnover to £125.2m and a 32 per cent increase in earnings before interest, tax, depreciation and amortisation to £1.3m, which resulted in a 16 per cent increase in net profit to £350,000.

Adviser view

Malcolm Steel, a chartered financial planner with Edinburgh-based Mearns & Co, said: “What would be good for the industry is providers knowing what their long-term strategy is, because it seems that they make a big decision such as leaving the advice industry and then do a complete U-turn not long after.”