Skandia board chairman Bernt Magnusson and board director Lennart Jeansson have strongly defended the board's decision to publicise its internal split over the OM bid.
Speaking at a press conference in Stockholm this morning, the pair have said the board as a whole remains fully behind the Turbo plan to boost Skandia’s business – outlined in the document published earlier today, and that the ball is now firmly in the shareholders’ court.
”It’s not a good thing this is a split board, but we live in a free society. People have a right to disagree,” Magnusson says.
What is also the case, he adds, is that Skandia today is a very different company than it was a couple of years ago when it was dogged by performance and executive issues. That said, Magnusson adds he “would never dream of telling shareholders what to do.”
Shifting the responsibility to shareholders in this matter is not a clear-cut exercise however. There are some 116,000 shareholders split roughly 50:50 between Sweden and an unknown number of countries. There are an estimated 100,000 small shareholders, but Skandia as a company today has no idea who actually owns what number of shares because of the huge turnover on the market in the past few weeks, Magnusson and Jeansson admit.
An update of the shareholder register is not expected before the end of September, regardless of statements being made, such as that suggesting Fidelity has taken a 9% stake, they add.
Also yet to take place is the putting in place of a new Nomination Committee, which shareholders control in line with Skandia’s company rules. The committee puts forward names for consideration to board positions at the company’s AGM. Under the current rules, the committee is made up of five members, one from each of the four largest shareholders, plus one representing smaller shareholders. The representatives of the larger shareholders are selected on the basis of the ownership structure of the company at the end of the third quarter.
Given the current state of the bid on the table and the churn in shares on the market there is a likelihood the committee representatives could change, and that alternative board members could be in place before any ownerships change is finalised.
No board members are considering leaving of their own accord before the ownership question is settled, Magnusson says.
”Right now nobody on the board thinks it would be a good idea to leave – before the shareholders make up their minds.”
Lennart Jeannson says shareholders should be able to make up their minds given the information now available. Whatever the decision, it should be made on the basis of fully absorbing the arguments put forward supporting the board’s rejection of the bid offer.
”It’s the board’s role to develop a view, which has been worked on for a long time. I think people should respect the hard work that’s gone into the document," he says.
That still leaves the question of just how quickly will shareholders make up their minds. Magnusson says in response to a question of whether the company has failed to communicate as well with its smaller shareholders as its bigger ones, and whether this will affect the speed of investor decisions: “It’s only today that the document has been published, but there is a possibility that some shareholders might announce their decision shortly.”
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Jonathan Boyd on 020 7484 9769 or email [email protected].IFAonline
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