Resolution, the acquisitive life company which rocketed into the FTSE-100 when it bought the Abbey life funds last year, sparked takeover hopes yesterday with the shock resignation of chief executive Paul Thompson.
Thompson, the accountant who drove the growth of insurer Britannic then took the helm after its merger with Resolution Life, has left with immediate effect, the company said.
His pay-off includes 18 months' salary or almost £800,000 but his share options could be worth another £7m.
The shares rose 21p to 644p amid speculation that founder Clive Cowdery, a former Scottish Amicable executive, is lining up a sale of the group, with analysts at Fox Pitt Kelton naming Standard Life as a possible buyer along with Friends Provident.
Resolution said Mike Biggs, finance director, would take over as chief executive with immediate effect.
Resolution, which has quadrupled its size in the past two years through acquisitions, said in November it was in talks with unnamed parties over its future, which could include purchases or a bid for the firm. It said yesterday it remained in "various discussions", but gave no details.
Market rumours have recently named US giant American International Group as a possible bidder, while Resolution has also been named as a possible partner for insurer Prudential, due to announce the results of a UK review next week, or for reinsurer Swiss Re, among others.
The company said Thompson's departure was jointly agreed and amicable and a spokesman dismissed talk of a split between Thompson and Cowdery, saying the move prepared the group for the "next stage in its development".
But analysts said the departure, at a key point in the company's life, could mean a disagreement over its future.
Trevor Moss at Man Securities said: "It's a peculiar time, given they are in the throes of deal-making. They have said it's not an operational issue - the performance is still strong - so you have to assume it's a falling out or a big disagreement over strategy between Thompson and Cowdery."
Thompson was appointed chief executive of insurer Britannic in 2003, and presided over a controversial scrapping of the dividend which saw its market value collapse, only to recover dramatically.
Resolution said it plans to continue its pace of growth, both organically and through mergers and acquisitions. It is due to report 2006 results on April 3 and said its performance had been "strong" over the year.
l Norwich Union is to outsource the administration of a third of its life insurance and pensions business to Swiss Re as part of a drive to improve service and to cut costs, Up to 1000 employees based in Norwich and Stevenage will transfer to Swiss Re as part of the deal which will see nearly three million policies administered by the reinsurance giant by 2009.
The 1400 employed in Perth in general insurance are not affected.
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