Friends Provident, a British insurance company, has accepted a revised bid from a buyout firm, Resolution, worth £1.86 billion ($3.1 billion) after rejecting two previous offers.
Resolution announced Tuesday that it would offer 0.9 shares for each share of Friends, almost 10 percent higher than its initial offer last month, and said it would give Friends’ shareholders the option to sell up to £500 million of stock in exchange for cash.
The acquisition is the first for Resolution, which was founded by Clive Cowdery, the former head of General Electric’s European insurance unit, as well as a major turning point for Friends, which was first publicly traded in 2001. The cash part of the deal is coming from the £600 million that Resolution raised with its initial public offering in December.
On Tuesday, Friends reported a decline of 38 percent in first-half underlying profit, which differs from book profit in that it is adjusted for one-time events. The company added that its outlook for the year remained cautious, but it maintained a dividend of 1.3 pence a share.
“Trading conditions remain tough,” Trevor J. Matthews, the chief of Friends, said in the earnings statement. “In the U.K., the economic slowdown has reduced new business from increments and new members on our existing group pensions schemes.”
The Friends board is set to approve the Resolution offer unanimously, Resolution said. John Tiner, chief executive of Resolution, said he expected the deal to be done by the end of October.
“We are excited by the potential for our proposed restructuring of the U.K. Life Assurance and Asset Management Sector,” said Mike Biggs, the buyout firm’s chairman.
But Resolution’s ambitions are even wider. In a conference call Tuesday with reporters, Mr. Cowdery said his company’s goal was “releasing the capital inside of the life insurance sector today and returning it to investors.”
He said the company was looking for further acquisitions in the sector that could be restructured and eventually relisted.
Mr. Matthews said the management of the company was “enthusiastic about the future with Resolution.”
