The board of Swedish insurer Skandia said on Wednesday that it 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,” it said in a statement.
Skandia’s board was reacting to the announcement on Tuesday that acceptances of Old Mutual’s offer have been validated representing 62,5% of all the shares in Skandia and that it will therefore be proceeding with the offer.
Old Mutual also announced that it is extending the acceptance period until January 12 2006 and that it has not yet received the requisite approvals from all regulatory authorities.
Skandia shareholders will continue to have the right to withdraw tendered shares during the extension period, Skandia said.
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 said.
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, it added.
“With Old Mutual as Skandia’s principal shareholder, Skandia’s customer relations would be unchanged.
“Yesterday’s announcement by Old Mutual entails that Skandia has a large number of shareholders who have not accepted the offer. 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,” it said.
Holders of Skandia shares will have a number of important rights vis-Ã -vis the prospective majority shareholder, 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, it said.
In addition to these principles, Skandia shareholders with more than 10% either individually or as a group have additional protections. Among other things, they can call for a general meeting, ensure or establish a minimum dividend, block a complete takeover, and prevent the discharge 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, the company said.
Skandia’s board and management will now engage in discussions with Old Mutual over how they wish to proceed and what the cooperation between the two companies should be going forward. Naturally, the forms of cooperation must be characterised by respect for Skandia as an independently listed company and thus by respect for all of the company’s shareholders, it said.
“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,” Skandia’s chairperson, Lennart Jeansson, commented.
“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,” he concluded. — I-Net Bridge