Friends Provident 'eyeing up' stake in St James's Place Capital

Published on Sunday 12 October 2008 20:57

FRIENDS Provident chief executive Trevor Matthews is considering buying up HBOS's majority stake in wealth manager St James's Place Capital, weekend reports claimed.

Matthews, who was previously head of the UK arm of Edinburgh-based insurer Standard Life, is expected to update the market on the sale of Friends' Lombard and F&C units at the end of the month – and analysts say an acquisition of SJP would fit "nicely" with the firm's ethos.

The near-60 per cent stake in SJP is one of the assets that are expected to be sold off by Lloyds TSB if it successfully completes its acquisition of HBOS.

A source in the City was reported as saying: "St James's Place Capital would sit very nicely with Trevor's thinking. Any chance of selling F&C or Lombard would seem to have gone so this deal could make real sense – if it can in this environment."

But the sale of the Lombard finance arm is far from certain after reports that negotiations with private equity group CVC have stalled.

It has been claimed that Dutch group Rabobank is in talks to buy the 52 per cent stake in asset manager F&C, but a management buyout is also believed to still be on the cards. In July, St James's Place said its group operating profit fell to 114.2 million in the six months to June from 120.7m a year earlier.

The company offered reassurances that customer demand was holding up in the face of tougher markets, with first-half sales up 3 per cent at 220.7m thanks in part to strong sales of pensions policies.