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Friends Receives New Approach from Flowers: Sources

Reuters
Monday, 11 Feb 2008 | 4:27 AM ET

U.S. private equity firm JC Flowers has written a second letter to Friends Provident seeking talks on the future of the British life insurer, just a week after it announced the outcome of a strategy review, sources familiar with the matter said on Sunday.

The Sunday Times newspaper reported Friends' management had rejected the approach, but one of the sources told Reuters that Friends had not dismissed discussions outright.

Flowers has been told not to expect talks directly with Friends' management at this stage, given the lack of detail in the letter asking for informal talks, but it has been told to speak to Friends' advisers, the source said.

Spokesmen for Friends and Flowers declined to comment.

Flowers, which has built a nearly 3 percent stake in Friends Provident, said ahead of Friends' strategy overhaul two weeks ago it was considering an approach for the firm.

A source told Reuters late last month that Flowers approached Friends' board before Christmas calling for informal talks, and suggested it could make an indicative bid of 175 pence per share, a level now far above its market price, which was 131.20 pence at Friday's close.

The latest letter is understood not to have included a price, one of the sources said.

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