Old Mutual may ease conditions on bid on Skandia |
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Published
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Tue, 04 Oct 2005 20:40
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LONDON: Insurer Old Mutual, now in a 3.4 billion-pound bid for Swedish insurance company Skandia Insurance Co Ltd, has indicated that it may not insist on the condition that 90 per cent of the former's investors accept the proposal. According to sources close to the deal, the London-headquartered Old Mutual is keen on the acquisition.
Some shareholders, including investment firm Robur, a unit of Swedbank and having 2.5 per cent holding in Skandia, have rejected Old Mutual's offer mainly claiming it is too low. Robur's chief executive Mats Lagerqvist said, besides the low price the merger offered only limited scope.
Three Swedish pension funds, which owns 5.5 per cent stake in Skandia, have also rejected the Old Mutual's offer. Skandia's board had earlier rejected the bid by a majority vote.
Old Mutual, however, said it will continue with the process insisting on a 90 per cent acceptance and publish a bid prospectus accordingly. Its chief executive Jim Sutcliffe is of the view that at least 60 per cent of Skandia shareholders are in favour of the deal.
Old Mutual had come up with the offer in August after a protracted dialogue with Skandia's board. Skandia seems to be having other reasons -- political -- disfavouring the deal, especially the London insurer's investments in Zimbabwe, including substantial holding in a newspaper owned by supporters of Robert Mugabe. Some Swedish politicians have openly opposed the deal.
Skandia's largest shareholders are Finnish bank Sampo, Fidelity, and Swedish investor Cevian Capital besides Robur and the national pension funds.
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