Friends stays mum on RSA deal fee

FRIENDS Ivory & Sime mystified the market today when it refused to reveal the fee it would be paid for running Royal & SunAlliance's £36bn asset management arm.

FIS shares rose 16 1/2p to 239p after the fund manager said it would pay £240m for the contract to manage the RSA business, making it a top 10 UK fund manager with assets of £70bn. But analysts said while FIS would benefit from the increased scale, there was little way of knowing if it was a good deal. FIS chief executive Howard Carter said: 'All I can say is the rates are market rates for this type of business.'

FIS also refused to reveal the cost savings and job losses that would flow from the purchase. RSA's fund management arm is one of seven businesses the insurer has said it intended to sell in an attempt to raise more than £800m. The strategy is aimed at enabling the group to focus on its core businesses of insurance and underwriting.

Carter said the purchase was expected to be earnings enhancing next year, assuming the synergies target was hit. The deal came as Friends Provident revealed 10.2% growth in underlying sales in the first quarter of this year compared with the same time in 2001.