DUTCH FINANCIAL giant Eureko has withdrawn its €1.2 billion proposal to buy out FBD Holdings and rejected the insurer's claim that its takeover approach was "entirely without merit".

Eureko, which owns the Friends First investment and pensions company, had planned to merge FBD with that business and float the combined entity on the Irish stock exchange while retaining a controlling stake.

In a statement last night, the group said its proposal provided FBD investors with "certainty of value at an attractive cash premium" or the option of taking a shareholding in an enlarged listed group.

FBD insisted, however, that the Eureko proposal offered neither commercial logic nor certainty of value.

It was not immediately clear whether Eureko's decision to cancel the proposal was a tactical manoeuvre in advance of a planned re-engagement with the insurer at a later date or a definitive withdrawal from the scene.

The group's chief spokeswoman acknowledged that Eureko holds an interest in FBD stock via contracts for difference but declined to quantify its stake. Asked if Eureko might renew its interest in FBD later, she said: "I can't honestly say. That is the position at the moment, that we are withdrawing it."

Eureko's withdrawal came around 6pm yesterday, ahead of FBD's annual general meeting (agm) in Dublin today, a meeting at which its management and board are likely to be questioned about the approach.

FBD shares were unchanged yesterday at €30.50 - some €5.50 less than the price mooted by Eureko - after the insurer moved on Sunday to reject the approach. FBD also stressed there was no formal offer on the table.

In its statement, Eureko made a point of saying it received "no communication from FBD" before its statement of rejection was issued.

"Eureko is disappointed that FBD has rejected its proposal without engaging in any form of dialogue with either Eureko or its advisers," it said.

"Eureko advanced a proposal which it considered to be attractive to all FBD stakeholders as it would create a significant financial services organisation with significant transaction benefits and strong commercial logic.

"Eureko believes that its proposal provided FBD shareholders with a choice of certainty of value at an attractive cash premium or an ability to remain as shareholders in an enlarged listed vehicle.

"Consequently, Eureko is now withdrawing its invitation to FBD to consider its proposal."