Regan calls off pursuit of Royal & Sun

CONTROVERSIAL financier Andrew Regan walked away from a possible £2.4bn takeover of Royal & SunAlliance today with his tail between his legs.

But his advisers insist that Regan's takeover vehicle Corvus Capital is a serious proposition with substantial international supporters ready to back a deal, even if it isn't RSA.

At the end of a week in which the City has been mulling over the credibility of what seemed like an outlandish attempt by Regan to take on RSA, Corvus today put out a statement ending speculation.

The statement - which was overseen by the Takeover Panel, the City's policeman of mergers and acquisitions and which now bars Corvus from going for RSA again for another six months - said: 'RSA is a company that represents an attractive acquisition opportunity and one which is in line with Corvus's investment strategy.

'However, Corvus remains mindful of the complexities inherent in a company operating within the insurance sector such as RSA and with this is mind would only have intended to proceed with an offer for RSA with the co-operation of its existing management.

'This cooperation was not forthcoming and, although encouraged by preliminary discussions held with potential funders of a cash offer, due to the time constraints under which it would be required to proceed, Corvus has decided not to continue its formulation of an offer at this stage.'

It is not the first tilt at a high-profile target by Regan whose attempted £1.2 billion takeover of the Co-op in 1997 ended in a bribes and financial skulduggery trial. He was cleared of all charges in 2003.

His supporters insist that via Corvus he is a serious player for a substantial takeover deal backed by money from international funds. Regan has yet to disclose who is backers are but it is believed he is scouring up to five sectors for takeover targets with the financial services industry possibly a favourite.

The statement added: 'Corvus continues to examine a number of investment and acquisition opportunities which it believes would create significant value for its shareholders.î

Shares in RSA fell 2p to 81½p today after a strong performance this week on the back of the takeover speculation. The struggling company, whose insurance products include the More Than brand, has seen the shares collapse by more than 80% in the past five years.

RSA said earlier this week: 'Royal & SunAlliance confirms that it has not received any approach nor is it involved in any discussions which could lead to an offer being made for the company.'

Corvus shares were today steady at 11p.