Skandia rejects Old Mutual

The board of Swedish insurer Skandia, the target of a takeover bid by British-listed Old Mutual, said Friday it did not recommend that shareholders take up the offer.

“Skandia’s board is of the opinion that the offer is not attractive for Skandia’s shareholders,” the company said in a statement.

A minority of board members are positive towards the bid. These include the company’s chairman, Bernt Magnusson.

The majority opinion on the board was that Old Mutual’s offer was too low, TT reported.

“A merger between Old Mutual and Skandia, also lacks industrial logic, in many respects,” the board wrote. There were also limited prospects that the merged companies would benefit from making economies of scale.

Old Mutual on September 2 lodged a cash-and-share takeover bid for Skandia to create one of the Europe’s top 10 insurance giants, offering 43.60 kronor per Skandia share, valuing the Swedish company at 44.9 billion kronor.