| Old Mutual lowers Skandia acceptance level |
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LONDON: South African insurer Old Mutual Plc. has reduced the level of holding for securing control of Skandia AB to 50 per cent from the earlier 90 per cent. It said the offer will cease on 16 December if the target is not reached.
London-headquartered Old Mutual is into a $5.8 billion hostile cash and share take over bid of the Stockholm-based company.
Old Mutual's chief executive Jim Sutcliffe said a significant number of Skandia's shareholders remain supportive of the deal even as its own shareholders have shown support. The reduction in the acceptance level is to accelerate the offer process, he added.
Sutcliffe said procedures concerning regulatory issues are progressing.
He added he was still hopeful of getting support from 90 per cent of Skandia investors.
There is apparent resistance to the bid, especially from Sweden's national pension funds and Third Avenue International Value Funds in the U.S. Skandia's board says the bid underestimates the potential of the company. Chief executive officer Hans-Erik Andersson has said he would expect at least 50 kronors for a share to consider the offer.
Analysts believe at least 18 per cent of the investors will reject the offer.
Old Mutual will have to have at least 67 per cent of Skandia stake in order to replace the company's present board. Analysts also calculate that it must have at least 75 percent to achieve tax savings from the deal and 90 percent to remove minority shareholders.
Posted
on : Thu, 01 Dec 2005 16:15 GMT | Insurance News
By : Mike Lawson
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