A battle for supremacy between some of Britain’s biggest insurance players will begin in earnest this week, when Resolution posts details to shareholders of its plans for an £8 billion merger with Friends Provident.

The move by Clive Cowdery’s closed life fund consolidator could come as early as today. It is expected to trigger a 660p-a-share all-cash counterbid for Resolution from Pearl, a rival “zombie” fund run by Hugh Osmond, the former pizza entrepreneur.

Pearl is already Resolution’s largest shareholder, with a stake of 16.8 per cent. It is likely to launch a bid on its own or join forces with Standard Life, the increasingly acquisitive life and pensions group led by Sandy Crombie.

Both Pearl and Standard Life have had access to Resolution’s books.

“You can assume that Pearl is ready to move very swiftly,” one source said. “Clearly, there are parts of Resolution that are not interesting to Pearl but would be attractive to Standard Life.”

Standard Life would want to take Resolution’s small open life book, inherited as part of last year’s £3.6 billion acquisition of zombie funds from Abbey, the mortgage lender. It would also be interested in taking control of the fund management unit Resolution Asset Management (RAM). As part of the agreed deal with Friends, RAM is destined to be merged with F&C, controlled by the life and pensions firm.

Pearl is interested only in Resolution’s book of closed business, which includes the former Royal & SunAlliance, Swiss Life and Britannic closed funds. However, the cash generated by Resolution’s closed books is also of interest to Standard Life, which needs capital to fund new business growth.

Pearl is understood to have lined up funding for its bid from Morgan Stanley and Deutsche Bank.

Standard Life, which is being advised by Merrill Lynch, would almost certainly have to issue fresh shares to pay for an acquisition, particularly if it acted on its own.

Resolution is being advised by Lazard, the investment bank.

The arrival of Pearl and Standard Life on the scene has thrown a spanner in the works of Mr Cowdery’s deal with Friends Provident. Resolution hopes to hold meetings with shareholders this month, to secure approval at a subsequent emergency meeting and to complete the merger by the end of November.

Shares in Resolution closed last week at 694½p a premium to the expected Pearl bid. Friends Provident ended 1.3p higher at 173.9p.

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