Standard Life confirmed yesterday that it may gatecrash the £8bn merger of Resolution and Friends Provident. The Edinburgh-based insurer told the stock exchange that it is considering a cash-and-shares offer for Resolution which could top £4.5bn, a move which will generate fresh uncertainty over hundreds of Glasgow jobs.

A merger of fund management arms Standard Life Investments (SLI) and Glasgow-based Resolution Asset Management (RAM) would offer significant scope for economies. Resolution also used to employ 1800 life and pensions staff in Glasgow, but around 1550 transferred to Capita on August 1 under an outsourcing deal announced in June. It is unclear how their futures would be affected by a Standard Life takeover.

Though Resolution and Friends Provident have got as far as posting documents on their merger to shareholders, the deal has been dogged by reports over opposition from investors and the potential for competing bids.

Entrepreneur Hugh Osmond's unlisted Pearl Assurance, which owns around 16% of Resolution, is also said to be considering an all-cash bid of its own, having been vocal in its opposition to the Friends deal.

Swiss Re and Axa have also been linked to possible interest.

Resolution, the aggressive and highly-successful acquirer of closed life office books, is known to have approached Standard before the latter's July 2006 flotation. Last December Standard chief executive Sandy Crombie said he was not interested in a merger with the company.

In its statement yesterday, the Edinburgh company said it is "considering the possibility of a cash-and-shares offer for Resolution, which might possibly include disposals of certain assets", giving no further details. It was suggested yesterday that Pearl might look more favourably on a deal that allowed it to pick up parts of Resolution which complement its operations. Pearl is believed to have held talks with Standard Life over a potential joint bid for Resolution which came to nothing.

The statement added: "Any offer would only be made if the Standard Life board considered it to be in the best interests of Standard Life shareholders."

Standard Life chairman Gerry Grimstone and Resolution counterpart Clive Cowdery are believed to have held several informal meetings recently, including one last week. Grimstone is understood to have sought access to financial information on Resolution available only to potential bidders.

Keith Skeoch's Standard Life Investments employs 770 and at June 30 had £140.6bn under management, compared with 400 staff and £57bn of assets at Gavin Stewart's RAM operation. Both are growing quickly.

It would appear likely that the bulk of RAM's funds would be taken on by SLI, especially the in-house life funds. It is also feasible that RAM chief executive Stewart could lead a management buyout of several investment boutique joint ventures he has set up with external fund managers.

One big attraction for Standard Life is the Scottish Provident protection business owned by Resolution, which the Edinburgh company is known to have long coveted. Another obvious benefit for the Edinburgh company is that the acquisition of such a major player would help prevent it becoming takeover prey itself.

Kevin Ryan, an analyst at ING, commented: "Resolution and Standard Life potentially makes a lot of sense, depending on what the terms were."

Standard Life's shares surged 8% at one point yesterday before reining back to close up 1%, or 2.25p, at 277p. Friends Provident shares lifted 2%.