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Buxton backs Friends deal as Aviva says 1,500 jobs could go

(Update) Fund managers Richard Buxton and Alastair Gunn have backed Aviva's proposed deal to take over rival insurer Friends Life.

Buxton backs Friends deal as Aviva says 1,500 jobs could go

Fund managers Richard Buxton and Alastair Gunn have backed Aviva's (AV) proposed deal to take over rival insurer Friends Life (FLG).  

The public support from the two managers comes as Aviva published its prospectus on the deal, in which it said the merger could lead to around 1,500 job cuts.

At the end of November Aviva and Friends Life shocked the stock market by announcing they were in talks over a £5 billion merger

The two companies have reached an agreement under which Aviva would acquire the entire ordinary share capital of Friends, which means Friends shareholders would own 26% of the merged company. 

Citywire AAA-rated Buxton (pictured) holds both Friends Life and Aviva in his Old Mutual UK Alpha fund. Ahead of the deal being announced, these holdings accounted for around 7.5% of his flagship fund, although he said he would sell down this position so as not to breach his self-imposed limit of no one company accounting for more than 5% of the fund.  

He told The Telegraph: 'This is a case of two plus two equals a lot more than four.' 

Citywire AA-rated Gunn, who runs the Jupiter Distribution and High Income funds, and who holds Friends Life, also backed the bid. 

He told the paper: 'I’m very supportive because it gives exposure to a stronger long-term growth story and the combined company would be run by an impressive management team.'

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Related Fund Managers

Richard Buxton
Richard Buxton Average Total Return:
22.08%
72/165 in Equity - UK (All Companies) (Performance over 3 years)
Alastair Gunn
Alastair Gunn Average Total Return:
-8.34%
151/205 in Equity - UK (All Companies) (Performance over 1 year)
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