Shareholders of Old Mutual plc, South Africa’s largest life insurer, have approved four separate resolutions allowing the company to implement its R38-billion ($5,5-billion) offer for Swedish insurer Skandia, the company said on Monday.
Old Mutual shareholders voting in an extraordinary general meeting accepted a resolution to approve the bid for Skandia by a 92,4% favourable vote. They also voted 92% in favour of resolutions to increase Old Mutual’s authorised share capital and to allow the remuneration committee to amend performance conditions applicable to certain long-term performance incentives.
Finally, 91,8% accepted the resolution granting the directors the authority to allot Old Mutual shares as part of the bid for Skandia.
Earlier on Monday, Old Mutual announced that it had extended the Skandia offer closing date to December 16 from November 21.
Commenting on the results of the votes, Old Mutual CEO Jim Sutcliffe said: “As the weeks have gone by, we have increasingly received the message that our shareholders are keen to get the deal completed because they know it is the right thing for us and offers the best growth potential for the future. This is clearly shown in the voting patterns today and I am delighted with the result.”
Old Mutual has offered 43,60 Swedish kronor per share for Skandia in a combination of debt, cash and Old Mutual shares. The bid has turned hostile following the Skandia board’s majority rejection of the bid, with Skandia management now going all out to convince the Swedish insurer’s shareholders not to accept it.
So far, Skandia shareholders representing just more than 15% of Skandia’s share capital have announced they will not vote in favour of the bid. However, Old Mutual management remains confident of obtaining the 90% shareholder acceptance level that is a condition of the offer.
For every 100 Skandia shares tendered, each Skandia shareholder would receive 1 650 Swedish kronor in cash and 137 new Old Mutual shares — equivalent to 16,5 Swedish kronor in cash and 1,372 new Old Mutual shares per Skandia share.
The merger of Old Mutual and Skandia would create Europe’s eighth-largest insurance company, with a market capitalisation of about £7,9-billion, assets under management totalling £192-billion, and an embedded value of £7,5-billion, with a pro-forma embedded value per share of 137 pence.
Under the combined cash and share offer, Skandia shareholders would represent 26% of the enlarged group, and the company would have a secondary listing on the Stockholm Stock Exchange. — I-Net Bridge