London-listed life assurer Old Mutual plc has received acceptances for 71,6% of Swedish insurer Skandia’s shares. Old Mutual is offering R38-billion for the Swedish insurer.
The company said on Wednesday that acceptances of its offer received by January 23 have now been validated, representing 71,6% of the total number of shares and votes in Skandia on a fully diluted basis.
Other acceptances received by that date are in the process of calculation and validation, and a further announcement will be made on January 26, it added.
Old Mutual said on Wednesday that regulatory approvals from Poland and Spain remain outstanding and are expected to be received shortly. Accordingly, the offer has been extended until 2pm British time on January 26.
The same terms and conditions as applied in the previous acceptance period continue to apply in this extended acceptance period, it added.
Old Mutual’s offer period for Skandia originally closed on January 12 and was extended to January 23 and now to January 26.
The Old Mutual bid, which it launched formally in September, has met stiff opposition from the Skandia board and some of Skandia’s Swedish shareholders who have been holding out for a higher price. This has prevented Old Mutual from garnering its hoped-for acceptance level of 90% or more, which would maximise cost and tax savings between the two companies.
In early January, a number of minority Skandia shareholders showed they would not give in easily, joining forces under the leadership of the Second Swedish National Pension Fund (AP2) to make demands from Old Mutual regarding their board representation and rights to approve all future transactions between Old Mutual and Skandia.
Swedish investors remaining opposed to the offer are reported to include the First, Second and Fourth state AP pension funds, Nordea Funds, Robur Funds and Handelsbanken Funds.
Old Mutual has continued to reject the possibility of raising its offer for Skandia, setting the majority shareholder and minorities against each other.
However, once the offer has become unconditional, Old Mutual will have the option to buy more Skandia shares on the open market up to an additional 10% stake. This would take it beyond the key 75% shareholding level that would allow it to benefit from tax savings in the United Kingdom, as well as move Skandia’s listing to the more illiquid “B” list of the Stockholm exchange. — I-Net Bridge