The continuing cat and mouse game between Old Mutual and Skandia has taken another turn this morning with Skandia announcing it is "still of the opinion that Old Mutual's offer to Skandia's shareholders is inadequate".
The announcement follows the news yesterday that Old Mutual has received acceptances of its offer on 62.5% of all the shares in Skandia enabling it to proceed with its offer for the insurer.
Old Mutual also announced yesterday that it was extending the acceptance period until 12 January 2006 and that it had not yet received the requisite approvals from all regulatory authorities.
Skandia however this has hit back this morning telling its shareholders they will still have the right to withdraw tendered shares during this period.
It had been thought the Skandia board might conceded defeat but in a statement issued this morning it says: “As a result of Old Mutual’s announcement, it is clear that Old Mutual could become Skandia’s principal shareholder, under the condition that Old Mutual receives approval in the outstanding regulatory matters.
“Skandia’s board is still of the opinion that Old Mutual’s offer to Skandia’s shareholders is inadequate. The efforts made by Skandia’s board to bring about a change in the offer have been without result. To date, Old Mutual has consistently rejected any suggestions of raising or otherwise improving the offer.
“Since the acceptance period has been extended for an additional three-week period, the definitive extent of Old Mutual’s acquisition pursuant to the offer cannot be determined until after the expiration of this extended acceptance period.“
Skandia also says yesterday’s announcement by Old Mutual leaves a large number of shareholders who have not accepted the offe adding "It is thus clear that Skandia will continue to be a listed company. The rules of the Stockholm Stock Exchange will therefore continue to apply for the company. The Board’s composition shall reflect the principles of the Stockholm Stock Exchange and the Swedish Code of Corporate Governance."
Meanwhile, should Old Mutual not tighten its grip on Skandia by 12 January the smaller shareholders of Skandia will have a number of rights in relation to Old Mutual. These rights include the ability to demand equal treatment and to prevent actions in a manner that gives undue advantage to Old Mutual or others to the detriment of Skandia or Skandia’s minority shareholders, says Skandia.
And in a clear defence of its independence the board has also told its shareholders, those with with more than 10% at least, they have additional powers. Among other things, they can:
• call for a general meeting,
• ensure or establish a minimum dividend,
• block a complete takeover, and
• prevent the sacking of the Board or President from liability.
Based on these rules, Skandia will continue to be governed as an independent entity as long as there are minority shareholders still holding shares in Skandia.
Skandia’s board says it "will now engage in discussions with Old Mutual over how they wish to proceed and what the co-operation between the two companies should be going forward."
"Naturally, the forms of co-operation must be characterised by respect for Skandia as an independently listed company and thus by respect for all of the company’s shareholders," it adds.
Skandia’s chairman, Lennart Jeansson, says: “The fact that Skandia has obtained a new principal owner in Old Mutual, with more than 50% of the shares, is not without precedent in the Swedish stock market. A large number of listed Swedish companies have historically been dominated in terms of votes by one or a handful of owners. We understand that Old Mutual is familiar with the principles that have been established for how large shareholders exercise their influence while maintaining respect for the rights of other shareholders.
“The offer process has been lengthy. Clarity about the shareholder situation is essential, so that Skandia and Old Mutual can concentrate on their businesses and their customers.”IFAonline
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