LONDON (ShareCast) - Shore Capital has reiterated its ‘hold’ recommendation on insurer Standard Life after the company confirmed speculation that it is in talks with Phoenix regarding the potential purchase of the latter’s Ignis Asset Management division.

Standard Life said it was in "exclusive and advanced" discussions with Phoenix about a potential acquisition of Ignis, although it stressed talks were ongoing and there was no guarantee of a deal.

Shore Capital Analyst Eamonn Flanagan said that the move compounds his view that Standard Life is “increasingly setting its stall out as an asset accumulator and asset manager as opposed to a life company”.

“Such a deal is likely to reduce the likelihood of further special dividends in the short term,” he added.

As for Phoenix, Flanagan said that a sale of Ignis “would be likened to 'selling the family silver'”.

“Ignis offers Phoenix a point of difference compared to other closed funds and appeared to be gaining traction in the third party world, whilst retaining an excellent reputation in the fixed income space.”

Flanagan also said that the talk of Phoenix being under pressure to accelerate its debt repayment as “odd” given the recent rescheduling of said debt by the group.


BC

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