News Column

Friends Life Pledges Shareholder Return After Selling Lombard To Blackstone

July 10, 2014

Steve McGrath

LONDON (Alliance News) - Insurer Friends Life Group Ltd Friday said it has sold high-end wealth manager Lombard to funds managed by investment and advisory firm Blackstone for up to GBP356 million, and intends to return GBP261 million of the proceeds to shareholders through a share buyback.

The deal means the company is more focused on its main life insurance business, Friends Provident.

In a statement, Friends Life said it will get GBP317 million initially for Lombard International Assurance SA and Insurance Development Holdings AG, including GBP254 million in cash up front, about GBP7 million interest equivalent, and a GBP56 million deferred payment in the form of a vendor loan note.

The vendor loan note could then increase or decrease by up to GBP39 million depending on criteria linked to Lombard's future assets under administration, it said.

The deal is subject to antitrust and regulatory approvals, and the planned share buyback won't start until those have been received, Friends Life said.

"Lombard formed part of the group's initial purchase of Friends Provident in 2009 and is a leading European provider of long-term wealth planning solutions for high and ultra-high net worth investors. It has always had a different profile to the rest of the Group and we believe its disposal is in the best interests of both Friends Life and Lombard," Chief Executive Andy Briggs said in a statement.

"This disposal further improves our cash coverage of the dividend and is in line with our strategy to maximise value from each part of the group. It also allows us to deliver on our commitment to return cash to shareholders when it is appropriate to do so. It moves the group further towards being a streamlined life insurance company, focused on serving our customers in the UK and our hubs in Hong Kong, Singapore and the UAE through Friends Provident International," the CEO added.

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Source: Alliance News

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