Resolution raises £600 million war chest for acquisitions

Resolution Ltd, the new UK buyout firm of insurance entrepreneur Clive Cowdery aimed at buying assets of financially weak companies, has raised £600 million from investors ahead of its initial public offering next week, making it to be the fourth successful floatation in the UK this year amid the ongoing credit crunch.

Resolution had planned to raise £1 billion but said that £600 million was a decent amount considering the current financial climate as under normal circumstances the figure would look disappointing.

Resolution has placed 660 million ordinary shares at a price of £1 per share which was taken up by investors and Citigroup, the investment bank who are underwriters to the issue has been given an over allotment option of 60 million shares.

Former, FSA chief executive and now chief executive of operations at Resolution, John Tiner, has also committed to invest £20 million in Resolution as part of the placing which works out to approx 3 per cent of the company shares.

Other firms who could possibly have booked orders for shares in the company are Standard Life, Legal & General, M&G, Royal London Asset Management and Insight Investments as these firms made huge profits at the former company of Cowdery bearing the same name which he sold for £5 billion last year to rival Pearl Group after a long takeover battle.

The buyout firm is now confident that it can make deals and acquire weak financial service companies, especially those in life insurance and asset management as the current credit crunch is an ideal time to buy assets of weak as financial companies who are otherwise forced to take capital and lower risk.

The company, apart from eying acquisitions in the UK, will also target public and private companies Europe, including Gemany.

Cowdery had said Resolution will look for the natural long-term owners of companies.