A mooted £3.5 billion takeover of Friends Provident is under threat unless it agrees to bid talks by Friday, US buyout firm JC Flowers has warned.

Shares in the life assurer fell 10% to 118.10p after JC Flowers imposed the deadline. It is prepared to offer 150p per share in a cash deal, but is losing patience over not being able to conduct due diligence.

'In the event that the board of Friends Provident does not enter into discussions with JC Flowers prior to the close of business on Friday 18 April, it is JC Flowers' intention to formally withdraw its proposal,' the company said.

Friends Provident declined to comment, having last month rejected JC Flowers' bid as too low, saying that it 'significantly undervalues' the group.

The insurer has consistently refused to enter talks with JC Flowers since the private equity firm -- led by former Goldman Sachs Group banker Christopher Flowers - first expressed an interest in the group in January.

Friends Provident, the UK's sixth-biggest life insurer by market value, has been seen as vulnerable to a takeover since a proposed merger with closed life insurer Resolution fell through in November.