Resolution Life's proposed £3.5bn acquisition of Abbey's closed life insurance arm may involve a smaller rights issue than the City is expecting because of surplus capital pumped into the funds by Abbey during the last bear market, the Telegraph has reported this morning.
The paper says negotiations between Resolution and Abbey's Spanish owner, Santander, are continuing with an announcement expected within two weeks. The City is expecting up to half the cash for the acquisition to come from a rights issue that would be Britain's largest since Kingfisher raised £2bn to buy French DIY chain Castorama in 2002. But the Telegraph says Resolution believes the large amount of surplus capital in Abbey's closed Scottish Provident and Scottish Mutual life funds will enable it to involve a higher proportion of leverage than it would usually consider. This would h...
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