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Friday, 23 December 2005 |
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London based financial services firm, Old Mutual, has finally won its bid to take over Swedish life insurance company, Skandia. The original bid was made some months back but turned sour when Skandia’s directors urged its shareholders to reject it. They have since then tried to gather support among shareholders, claiming the company’s future would be better if it remained independent. For the full story
Old Mutual, which began life as one of South Africa’s key asset management and life assurance groups, said it will take a controlling 62.5 per cent stake in Skandia, following an extended acceptance period and regulatory approval. The acceptance period will run till January 12 2006. Sentiment about the deal still differed at the two firms. “I am delighted that holders of a majority of shares in Skandia have recognised the exciting potential of combining our two companies and I look forward to welcoming every member of Skandia’s staff around the world to the Old Mutual family,” said Jim Sutcliffe, Old Mutual chief executive.
Skandia’s management did not quite agree and claimed the offer remained inadequate, arguing the number of shareholders that rejected the offer was sufficient for the company to remain autonomous. It said it would retain its listing in Stockholm and therefore continue to operate under Swedish corporate law. Taking a somewhat defiant tone, it was swift to point out the rights minority shareholders retained. It said they should demand equal treatment and not allow Old Mutual to dictate as majority holder. Those with a 10 per cent or more could also block a full takeover and prevent the removal of directors and the chairman.
“We understand Old Mutual is familiar with the principles that have been established in Sweden for how large shareholders exercise their influence while maintaining respect for the rights of other shareholders,” said Lennart Jeansson, Skandia chairman. “Clarity about the shareholder situation is essential, so that Skandia and Old Mutual can concentrate on their businesses and customers,” he added.
Article courtesy of Portfolio International |
