By Myles Neligan
LONDON (Reuters UK) - Insurer Friends Provident (FP) said it had dropped efforts to sell financial advisory unit Pantheon Financial after failing to achieve a good enough price for the business.
"Despite a number of positive expressions of interest, Friends Provident believes it will not be possible in the short term to achieve a sale price that will realise suitable value for shareholders," it said in a statement on Monday.
Shares in Friends Provident were up 1.5 percent at 83.5 pence by 10:20 a.m..
"We had anticipated a 30 million pounds sale a few weeks ago, which was described as being imminent," Panmure Gordon analyst Barrie Cornes said in a note.
"This is disappointing news, as was the Dawnay Day impact on F&C last week and the limited number of takers for Lombard," he added.
Friends acquired Pantheon, a financial advisor to companies and wealthy individuals, for 33 million pounds last year.
But Friends put the business up for sale in January, alongside wealth management division Lombard and its majority stake in investment manager F&C Asset Management (FCAM), as part of a strategic overhaul launched after a planned 8.7 billion pound merger with rival Resolution fell through.
The disposal programme has suffered a number of setbacks, with Swiss Life (SLHN), seen as a potential front-runner in the Lombard auction, withdrawing from the sale process earlier this month.
Private equity firm CVC Capital Partners is currently in the leading position to buy Lombard, sources said last week.
Separately, shares in F&C tumbled last week on talk that its second-biggest shareholder, investment firm Dawnay, Day, had offloaded most of its holdings, reducing the market value of Friends' majority stake in the business.
Analysts said on Monday that Friends' decision to reject a 150 pence per share takeover approach from private equity firm JC Flowers in April had reduced the group's ability to lower its price threshold in negotiations with potential buyers of Pantheon.
(Additional reporting by Mike Elliott, editing by Will Waterman)
