Old Mutual’s takeover of Swedish life and funds management group Skandia is hanging in the balance after eight of Skandia’s 11 board members objected to the deal on grounds that Old Mutual has a substantial share in Zimbabwe Newspapers (Zimpapers).
The 51% state-owned Zimpapers is proprietor of such notorious purveyors of government propaganda as The Herald and The Chronicle.
Old Mutual Spokesperson Alex Sandberg confirmed that the company did own a share of Zimpapers, but said that the 24% share that had been reported on Swedish National Radio was incorrect. Old Mutual spokesperson Elian Wiener confirmed that Old Mutual had a 19,1% share in Zimpapers.
”Our long-standing involvement in Zimbabwe is well-known and it is not a matter of major concern in our discussions with Skandia, which are on-going,” said Sandberg.
One in two Swedes have some form of policy with Skandia, and it is understood that the board does not want their investment to benefit Zimbabwean President Robert Mugabe’s regime.
The Swedish National Radio website said: ”Old Mutual owns a big proportion, almost 24%, of the country’s newspaper house, Zimbabwe Newspapers.
”The state is a majority owner, and the political line of the newspapers is strongly pro-government.”
Skandia is one of the strongest financial brands in Sweden and is worth an estimated R37-billion. Old Mutual is planning to pay for 60% of the deal with its own shares, and the other 40% in cash.
Swedish National Radio journalist Patrik Holmström said the Skandia board had met last Sunday to discuss the Old Mutual offer. At the meeting, the board voted against the deal. ”One of the objections raised was the connection between Old Mutual and Zimpapers,” said Holmström.
Holmström said Old Mutual had confirmed that it would be making a bid in a few days. He said that he had been informed that the bid would be higher than originally expected.
The Swedish National Radio story said the Skandia board members believed that selling now would be a bad idea, and that they should hold out for a higher offer than Old Mutual’s.