Legal & General prepares to ward off Resolution approach

Advisers to the insurance group, including Nomura and UBS, are thought to have worked on the document as speculation continues to swirl about which insurance company is next on Mr Cowdery's list of targets. Resolution raised £600m from investors when it floated on the London Stock Exchange last year. The company was set up to consolidate the life insurance industry and agreed to buy Friends Provident for £1.86bn in an all-share purchase in August.

Resolution is thought to be eyeing a move for Clerical Medical or Scottish Widows next, both owned by the part-nationalised Lloyds Banking Group, although L&G is also known to be on its radar.

One senior banker described the defence document as a "natural response" and said any company in L&G's position would draft one in the current environment.

He added that the document would address concerns over the insurer's balance sheet – particularly over its long term capital position. This has been questioned in recent months after the company cut both its interim and full year dividend.

Last month, Tim Breedon, L&G's chief executive, insisted the company would not benefit from industry consolidation. He said it planned to grow organically claiming there were "very few cost or revenue synergies to be gained from consolidation".

Despite this, industry sources still see L&G as a serious contender on a list of nine targets Mr Cowdery has discussed with investors and analysts.

They claim that aside from the increased scale L&G would give Resolution, Legal & General Investment Management would also give it a strong asset management base to channel funds through.

The Friends deal was largely driven by the fact that 30pc of Friends' investors also held shares in Resolution. L&G also holds common shareholders with Resolution, including Schroders, Aviva and Standard Life, and was one of the original investors in Mr Cowdery's vehicle itself.

Many analysts claim Resolution will face difficulties getting joint shareholders to exert pressure on target companies' boards as it did with Friends.