Friends reunited

Resolution’s deal to take over Friends Provident is a whopper. Resolution has offered nearly £2bn in cash and shares for the insurer, leading to a bumper payday for legal advisers Linklaters and Slaughter and May (see | story).

But like all the best transactions, this one has a back-story – one involving two millionaire entrepreneurs and a mega-deal gone bad.

Firstly, just two years ago Friends Provident itself came close to merging with the original Resolution business, a closed life fund consolidator run by high-profile investor Clive Cowdery.

That Resolution ended up falling victim to zombie fund rival Hugh Osmond and his Pearl business after a bitter takeover battle in 2007. That £5bn deal now looks like a costly mistake – it dragged on for months, leaving Pearl saddled with enormous debt and Cowdery facing a Financial Services Authority (FSA) probe.

Now, after being cleared by the FSA, Cowdery is back on the merger trail with the new Resolution, which he launched last year to swallow up undervalued insurance assets.

The big question was: which law firm would get the call for his first big deal?

Herbert Smith was in the running, having advised Cowdery throughout the Pearl bid, but Slaughters also has close links to the tycoon and was instructed when he floated the new Resolution last year.

And the winner is… Slaughters, which now looks to have tied down one of the most sought-after clients in the City.