CVC moves for Phoenix

CVC Capital Partners has made an initial approach to insurance provider Phoenix Group Holdings regarding a buyout. Phoenix's share price surged on Monday having fallen by almost a third in the past year.

After rival insurance group Resolution retracted its bid for the company, Phoenix revealed it is currently considering an approach from CVC Capital Partners.

In response to media speculation, Phoenix said in a statement: “The Board is continuing to consider whether CVC’s approach may form the basis of an offer that is appropriate to recommend to Phoenix’s shareholders, although there can be no certainty that any approach will lead to an offer being made.”

A spokesperson for CVC confirmed that no formal bid has been made and the firm declined to comment further on the matter.

The Sunday Times had previously said Resolution was to offer £1.2 billion for the company. However, the bid reportedly fell through due to the lack of agreement about the business’ valuation.

Ron Sandler, chairman of Phoenix, said: “As we outlined at the time of our Interim Management Statement earlier this month, Phoenix is a resilient business with robust and predictable long term cash flows. The Board believes that Phoenix is in a strong position to deliver substantial value and has a compelling business model.” Sandler is also executive chairman of Northern Rock, which was acquired by Virgin Money earlier this week.

Phoenix is a UK-listed insurance provider specialising in closed life and pension funds and has £68.5 billion in assets.

A source with knowledge of the matter said the company's share price did not reflect its value, but added that it is under no time pressure to complete a deal. Phoenix will therefore look for an offer that reflects the progress it has made in meeting financial targets and resolving certain issues.