By Ian Fraser
Published: The Sunday Times
Date: 31 December 2006
STANDARD LIFE is expected to be immune from takeover for at least three to five years because of the success of its demutualisation and flotation on the London Stock Exchange, according to one of Scotland’s leading fund managers, writes Ian Fraser.
Before the insurer’s £5 billion initial public offering (IPO) last July, there was speculation it would become a bid target for the likes of Resolution Life or a large overseas financial services group. But Colin McLean, managing director of Edinburgh-based SVM Asset Management, said: “It didn’t go out ahead of the flotation, which was probably the best chance for someone to acquire it, so I think the existing management will now be given three to five years’ grace.”
The group is led by chief executive Sandy Crombie, who is not expected to retire until February 2009, and David Nish, who took over as finance director last month. Sir Brian Stewart, Standard Life’s chairman, is expected to retire during 2007, with Gerry Grimstone, the insurer’s current deputy chairman, widely tipped to replace him.
The Edinburgh insurer has become less attractive as a takeover target as its shares have climbed 25% since they were listed five months ago. They closed the year at 295p, against a FTSE 100 index up by almost 11% over the year. However, McLean said other UK life insurers – notably Prudential, Legal & General and Resolution Life – are more vulnerable.