Old Mutual to persist with bid on Skandia |
|
|
Published
:
Sun, 25 Sep 2005 16:05
|
LONDON: South African insurer Old Mutual is not giving up hope on its attempt to annex Swedish savings firm Skandia, though Skandia's board of directors, by a majority, had spurned the 3.4 billion-pound bid saying the cash and stock offer is inadequate.
Old Mutual's Chief Executive Jim Sutcliffe said he believes a majority of Skandia's shareholders are keen on the acquisition and as such he would re-launch the offer with the backing of these shareholders. He said he hoped to get 90 per cent acceptance.
Analysts familiar with the scenario believe it will not be easygoing for Old Mutual. There are some 35 per cent of the company's shareholders, who are basically retail investors and pension funds, who would not want such an acquisition at this stage. One clear indication is the decision of Sweden's state AP2 Fund, which has decided to reject Old Mutual's bid. However, AP1 fund, also a shareholder, said it is considering the bid and Swedish Handelsbanken's fund arm is awaiting Old Mutual's prospectus.
A representative organisation for the retail investors, the Swedish Shareholders Association, has categorically said it is against the bid. It has sought the resignation of the three Skandia directors who supported the bid, including chairman Bernt Magnusson.
The board members who opposed the bid said the price of 42.54 crowns per share is too low. It undervalued the company's market position, its strategic value and growth prospects. The company, however, said it would be open with its suitor, cooperate in preparing a prospectus and would not call for alternative bids. It also confirmed that ABN AMRO, which undertook the evaluation of the bid, had said the bid was "fair from a financial point of view".
Old Mutual eyes Skandia's British businesses, which comprised several investment products. It also holds stake in financial advisers' firm Bankhall. Old Mutual operates an assset management company built around hedge fund industry and Selestia, a firm marketing several investment funds.
Meanwhile, in a related development, Skandia said it is not in a position to give a clear idea about its main shareholders ad there has been a huge turnover of shares in the last two weeks.
Skandia is to elect a new nominating committee at the end of this month. It is this committee that proposes board members for approval at the company's AGM.
|
|
|
|
|
|
Print this Story
