Axa, the French insurance giant, will consider launching a rival bid for Friends Provident if JC Flowers, the private equity company that is currently stalking it, launches a takeover offer, according to a report in The Observer.
However, the report — citing City sources — claims Axa has ruled out working with Flowers or making a move on its own.
Friends' shares have risen more than 7% in the last two weeks after speculation that Flowers — which has just completed the largest buyout in financial services with a Gbp12.5 billion acquisition of US loans company Sallie May — was interested in acquiring the British insurer.
According to The Observer it has approached companies including Axa and Standard Life to propose a joint approach. Standard is also believed to have rejected the proposal.
One City adviser is cited as telling The Observer that Flowers' approach had put Friends 'in play' and predicted that, as well as Axa, Resolution — the company set up by Clive Cowdery to acquire closed insurance companies — would be likely to enter the fray.
Resolution is believed to have already approached Friends, along with other insurers including Standard Life and Prudential, about mergers.