Resolution says it will go ahead with a £2bn rights issue later this month even if the Axa deal falls through, as the proceeds can be used to fund other acquisitions.
Resolution will hold a general meeting to approve the £2.75bn take-over of Axa’s UK life business and its rights issue on 20 July, with the offer period due to start the day after.
However, the Clive Cowdery-led consolidation vehicle says the rights issue is not conditional upon completion of the Axa acquisition.
Should the deal not go ahead, proceeds from the issue will be invested on a short-term basis whilst other acquisition opportunities are considered.
Resolution will pay Axa £2.224bn in cash on conclusion of the deal, a further £26m in cash in an agreed post-sale reorganisation and up to £500m in deferred consideration notes.
It adds the consideration will be reduced if less than £1bn of the AXA reattributed inherited estate is available for release in 2011. If none of the estate is available, the consideration will fall to £2.6bn.
The rights issue offer period will start on 21 July with the results set to be announced on 6 August, when dealings of the new shares on the London Stock Exchange begin.
Investors will be offered 17 new shares for every 30 existing shares they hold at 150p. Resolution said it expects to raise gross proceeds of £2.055bn from the issue.
It adds the issue effectively represents a 91.7% discount to the closing price of an existing ordinary share of 60.30p on 11 June 2010 and a 38.1% discount to the theoretical ex-rights price of 242.2p.
The City has been awash with rumours about Resolution's next targets in the life sector.
Commenting on its strategy, Resolution says: "The businesses being acquired provide a good operational fit with Friends Provident and will provide increased scale in the key product areas of protection and corporate pensions."
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