Old Mutual will finally get Skandia |
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Fri, 27 Jan 2006 20:05
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LONDON: South African insurance company Old Mutual Plc. said it has now received acceptances for its $6.5 billion take over offer from 72.1 per cent of the total shares and votes in Swedish firm Skandia Insurance Co Ltd.
The insurer said Thursday its offer for Skandia is now wholly unconditional as the only remaining condition to be fulfilled -- the approval from the insurance regulator in Poland -- has been waived. It has extended the acceptance period for the offer until 9 February.
Now, Skandia shareholders, who have agreed to the deal, are obliged to sell their shares to Old Mutual, which is indication clear enough that it has virtual control over Skandia.
Skandia is convening an extraordinary general meeting on 21 February to elect a new board. The meeting will witness chairman Lennart Jeansson and some board members, who had opposed the deal, getting ousted from their positions. Shareholders who oppose the deal -- a minority -- include the state AP2 pension fund.
If Old Mutual is able to reach its earlier set target of 75 per cent of the total shares, it would be able to claim tax synergies from the merger. Analysts feel, this is still possible as Old Mutual can buy Skandia shares from the market to reach this level.
Old Mutual is now planning a secondary listing on the Stockholm stock exchange, where its shares are to start trading from 2 February. The firm, with its large presence in South Africa, will now be able to gain an entry into British and European markets. Skandia has a fast-growing business in Britain.
Old Mutual shares in London were up 1.4 per cent at 182.2 pence, while Skandia closed 1.1 per cent up at 50.3 Swedish crowns.
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