British life insurer Resolution on Wednesday rejected a takeover approach from rival Pearl that valued it at around 4.5 billion pounds ($9.2 billion).
Resolution said in a statement that Pearl had put forward a pre-conditional possible offer at 660 pence a Resolution share on Oct. 9. Under UK regulations, Pearl had to bid at least 660p, the highest price it had paid to buy Resolution shares in the market.
Resolution announced plans to merge with Friends Provident in July -- a move that would create the fifth-largest UK-listed insurer -- but Pearl threatened to muscle in on the tie-up just 24 hours after the terms were published.
"The board of Resolution believes that the proposal significantly undervalues Resolution and its prospects as part of Friends Financial Group Plc and therefore has rejected it," Resolution said in the statement.
Pearl, run by pizza-to-pubs entrepreneur Hugh Osmond, said last month it was considering making an offer for Resolution. Pearl was not immediately available for comment.
Rival life insurer and bank Standard Life has also said it was considering a cash-and-shares move on Resolution.
Shares in Resolution earlier closed 0.7% lower at 680p.