A SECRETIVE hedge fund yesterday declared itself as a major player in the increasingly bitter takeover battle between London-listed life insurer Old Mutual and Skandia, its Swedish target, reports the Daily Telegraph.
Noonday Asset Management was forced to make the declaration after its stake rose to 5.02% when it bought 400,000 shares yesterday, says the paper.
Noonday is an offshoot of Farallon, another hedge fund manager.
Its declaration, said Farallon, was also involved in its shareholding. It was made amid unsubstantiated rumours that either one or two hedge funds were considering withdrawing their acceptance of Old Mutual's £3.5bn offer for Skandia.
A spokesman for Old Mutual yesterday said the fund that was supposedly considering a withdrawal had so far refused to identify itself. "If there was any substance to this someone would have stood up," said the spokesman. Old Mutual has repeatedly said it will not raise its offer for Skandia.
Noonday refused to comment while Farallon did not return calls.
Nicolas Gianuaue, one of Noonday's directors, is believed to be worth £50m. In 2003 Noonday made a profit of £1m on £24.4m sales, after directors' pay of £16.3m. Old Mutual shares yesterday finished up 2p at 165¼p.
PERSIMMON is facing a shareholder revolt after the National Association of Pension Funds (NAPF) urged investors to vote against an incentive plan that eventually could net four of the FTSE 100 housebuilder’s top directors up to £10m in shares, reports the Times.
RREV, the NAPF’s voting advice offshoot, said it had “serious concerns” about the proposals, which could award a maximum total of 775,000 shares to John White the chief executive, who is poised to take the chairman’s role; Mike Farley, White’s successor; Mike Killoran, the finance director; and David Bryant, another director.
The paper says the share incentive plan is linked to cost savings targets after the takeover of Westbury. To achieve the maximum payout, the directors would need to achieve cost-savings of £30m next year, 20% above the £25m target stated by Persimmon at the time of the deal, and £48m the year after, also 20% above its stated £40m target.
Shareholders are to vote on the incentive plan at a meeting on January 6 at Persimmon’s head office in York.
RREV said that it opposed White moving from chief executive to chairman, arguing that it represented “significant deterioration” in the company’s corporate governance, which was “particularly regrettable” when it had just joined the FTSE 100.
RREV said that because White would receive the largest award under the plan, approval of it could be seen as supportive of his executive chairmanship. It added that even though the shares must be held for two years and would be forfeited if the directors left the company, the size of the award was too high in comparison with the savings targets.
A KEY defendant in the Enron prosecution yesterday agreed a last-minute plea deal, potentially worsening the outlook for his former bosses Kenneth Lay and Jeffrey Skilling who are due to face criminal trial next month, reports the Guardian.
Richard Causey, the former chief accountant at the bankrupt energy group, pleaded guilty to a single charge of securities fraud in exchange for a seven-year sentence.
The plea deal could prove pivotal in the most eagerly anticipated trial to emerge from the corporate scandals that gripped Wall Street in 2002, the paper says.
Causey had detailed knowledge of the financial workings at the company and will now help the prosecution to prepare its case against Lay and Skilling, former Enron chief executives. It was not clear whether he would also take the witness stand.
Enron filed for bankruptcy at the end of 2001 amid allegations of accounting fraud. The company allegedly hid debts and inflated revenues and profits through complex off-balance sheet deals. The company, once the seventh largest in the US, has since become a byword for corporate chicanery.
Thousands of workers lost their jobs and investors lost billions of dollars. There was also political fall-out. Lay had been a close supporter of the Bush administration, advising the government on energy policy, and was nicknamed "Kenny boy" by the president.
Causey, 45, originally pleaded not guilty when he was charged with 34 counts of fraud, conspiracy, insider trading and other offences in January 2004. His sentence could be reduced to five years depending on his level of cooperation.IFAonline
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