LONDON - South African insurer, Old Mutual said that it would continue to pursue Swedish rival Skandia despite the rejection of its offer by the Skandia board.
London-based Old Mutual said that it was confident that the deal would go through. Old Mutual Chief Executive Jim Sutcliffe said that the company would go through with the support of around 60 percent of Skandia investors who were in favor of the deal, "I am pretty confident.
Based on going and talking to their shareholders ... they are keen to go on. We have met with holders of more than 60% of Scandia's shares in recent weeks and received positive indications on the merits of our proposal from a vast majority of them," he said.
The Skandia board rejected Old Mutual's offer by a vote of 8-3. Last week Old Mutual had threatened to take the bid hostile since there appeared to be ill will between the board and senior management at the Swedish company. Shrugging off the rejection, Old Mutual said that it "remained of the view that in a consolidating financial services market the industrial logic of combining these two groups is compelling, providing prospects of enhanced growth with reduced risk for all shareholders."
But analysts say that Old Mutual would find it tough to gain 90 percent acceptance from Skandia's shareholders. The South African company was dealt a further blow when it was announced that the Swedish state AP2 pension fund, which owns around 3 percent of Skandia had said that it would reject the deal. The Skandia board has advised shareholders against the deal saying it was "unattractive."
Old Mutual has been pursuing Skandia since May. Skandia chairman Bernt Magnusson is supportive of the bid and said that Old Mutual had offered a 'fair price.' He said that despite the disagreement, the board meeting was positive, "The fact that we have a difference of opinion on this one point doesn’t mean that the atmosphere is bad. The work goes on, it’s business as usual," he said.
Posted
on : Sat, 24 Sep 2005 14:40 GMT | Insurance News
By : Salim Patel
|
