Regan mulls R&SA bid

THE financier best known for his attempt to buy the Co-op has Royal & Sun Alliance, Britain's second-biggest insurer, in his sights. Andrew Regan is understood to have identified the UK's second biggest insurer - owner of More Than - at the start of this year.

Regan went to the US last month to begin arranging financing for a bid but a number of obstacles remain in his way ? not least the size of RSA's pension fund deficit and the performance of the group's troubled American arm.

Shares in RSA have surged amid bid speculation. The stock climbed 5% last week, with more than 80m shares changing hands on Friday alone, making it the second most traded stock behind Vodafone.

Regan, made his first fortune from the Cadismark household products business he founded after leaving school at 17. It has not all been smooth progress for him. In 1997, he launched a £1.2bn bid for the Co-op but the deal collapsed amid a series of allegations.

Six years later and after three trials he was cleared of stealing £2.4m from a company he controlled, money that the Serious Fraud Office claimed was used to provide bribes to two CWS executives to agree a food supply contract.

Mr Regan said he was the victim of a dishonest Dutch businessman who was granted immunity from prosecution. A bid for RSA would mark a significant return to form for Regan following his takeover of Corvus Capital, an AIM-quoted investment vehicle last year.

RSA has shown some signs of an improved performance, trebling profits in the first three months of 2005 as benefits flowed from a restructuring. It has cut jobs on both sides of the Atlantic and reduced its exposure to risk in the US since taking a £651m underwriting loss there two years ago. The US problems stem from asbestos claims and compensation payouts.