Even for a man used to the twists and turns of corporate mergers and acquisitions, Clive Cowdery will have been startled by yesterday’s turn of events.

Friends Provident, the 177-year-old insurer being stalked by the self-made entrepreneur, dramatically turned the tables on its opponent by setting out its own plans for a merger.

Friends, with a market value of £1.6 billion, wants to take control of its smaller predator, which is, in effect, a £600 million cash shell after raising capital from a London listing last December.

The plan prompted a brief and noticeably non-committal response from Mr Cowdery and his lieutenants, who said merely that they welcomed “Friends Provident’s willingness to engage in discussions”.

This week, a leak, apparently from the Friends camp, forced Mr Cowdery and his Resolution vehicle to come clean on talks that he was conducting over a possible takeover of the insurer.

Resolution was set up last year as a vehicle that would allow Mr Cowdery and various industry heavyweights, including John Tiner, a former chief executive of the Financial Services Authority, to buy undervalued assets in insurance. Resolution is quoted on the stock market, incorporated in Guernsey and run by a management company on which Mr Cowdery and Mr Tiner sit. Neither serves on the quoted company board.

These unusual corporate arrangements have given rise to some criticism, not least from Sir Adrian Montague, the City mandarin who chairs Friends and, when news of the takeover talks broke, said that they were “significantly different from recognised public company best practice”.

There was also concern over the hefty management fees and profit-sharing arrangements that would go to Mr Cowdery and his partners on any successful acquisition. Sir Adrian’s letter, and comment in the media, prompted a further statement from Resolution yesterday, before the latest initiative from Sir Adrian and his board was known.

The statement insisted that the Guernsey domicile was not a taxdodging measure. It also said that the earnings of Mr Cowdery, Mr Tiner and their colleagues on the board of the management company “compare well with the remuneration of top executives in UK life offices” — with a pointed dig at the £720,000 annual salary paid to Trevor Matthews, the Friends chief executive.

Mr Cowdery is someone who attracts conflicting opinions in insurance, not an arena well stocked with strong characters. He built up a personal fortune by spotting opportunities not obvious to more traditional thinkers.

Born in 1963 in Bristol, he was brought up in modest circumstances and started work, with no A-levels or degree, as an insurance salesman. He moved up the ranks to work for the GE conglomerate, before striking out on his own in 2004 to set up the first incarnation of Resolution.

This initiative was based on the belief that there was untapped potential in closed-life assurance funds, then seen as the runt of the sector, where policies sat untouched after the initial sellers had lost interest and ceased to add new customers. Mr Cowdery believed that consolidation of these into a single vehicle brought advantages to policyholders and also economies of scale that allowed the purchaser to show a profit.

Some of his detractors have questioned whether he had any ability at managing a business. “He’s a deal guy,” said one critic, who has reason to regret his involvement with Resolution mark I. “He’s got no patience for longer-term issues or operational strategy.”

In 2005 Mr Cowdery reversed Resolution into Britannic, another closed-fund firm, which brought him to the stock market. By then he had already had his first encounter with the man who was to prove a constant rival: Hugh Osmond.

Mr Osmond, who achieved prominence bringing PizzaExpress to the stock market in 1993, had moved into insurance and pipped Mr Cowdery to the purchase of the closed-life funds of HHG, the City fund manager.

The two clashed again in July 2007. Mr Cowdery’s first Resolution tried to buy Friends Provident in an £8.6 billion agreed merger, but was frustrated by Mr Osmond’s Pearl Assurance — Resolution’s biggest shareholder.

In the event, Mr Cowdery agreed to sell Resolution to Mr Osmond at the end of 2007. The deal was done at the top of the market and Pearl was forced into a humiliating recapitalisation this year.

Shortly afterwards, the news leaked that Mr Cowdery and various acolytes were under investigation by the Financial Services Authority for possible wrong-doing as his earlier company was being sold to Mr Osmond. The timing was a disaster for Resolution mark II, which had to call off talks with potential acquisition targets.

Mr Cowdery was cleared of any wrongdoing, but there was a suspicion that the City regulator’s inquiry had in some way been prompted by the Osmond camp. They have denied this, pointing out that the negotiations with the regulator over the recapitalisation would have thrown up a number of new facts.

But the inquiry will have made an already fraught relationship with Mr Osmond even more difficult. “It was competitive rivalry, and they would happily share a drink together,” said one who knew them both then. But are they on such friendly terms today? “I don’t think they are.”

In sure style

Style: driven, fast-spoken

Background: educated Clevedon Comprehensive, Somerset; started as an insurance salesman

Best break: selling Resolution mark I to Hugh Osmond’s Pearl Assurance at top of the market

Worst break: the Financial Services Authority inquiry into that deal, which delayed further deals by Resolution mark II

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