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SKANDIA

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.

Published: 23 September 2005 09:04 CEST

“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.

AFP/TT

Scania review board dissects Volkswagen bid

IF Metall Union representative Johan Järvklo sits on the independent review board. File: TT

Åsa Thunman was appointed chairwoman of the committee, which has invited financial consultants from Deutsche Bank and Morgan Stanley as well as legal advisors from Swedish law firm Mannheimer Swartling to assist them in their appraisal.

Thunman said in a statement that the committee would look at whether the $9.2 billion bid was in the best interest of Scania shareholders.

The effect on Swedish industry would also be considered, underlined committee board member Peter Wallenberg Jr.

"It has noted that Volkswagen does not foresee any significant changes with regards to Scania and that Scania’s headquarters and its development centres will remain where they are today," Wallenberg Jr. said. "These matters are of course of importance to the company and for Sweden.”

At the plant in Södertälje, employees have been busy discussing the bid. Assembly line worker Ahmed told The Local that his colleagues did not fear that production would be relocated to Germany.

"They couldn't possibly move all these machines and equipment," Ahmed, which is not his real name, told The Local on Tuesday. "But everyone on the floor has been discussing the offer."

Volkswagen tabled their $9.2 billion bid to swallow up Scania last Friday. It already owns 89 percent of Scania's voting rights and 62.6 percent of the company, with VW eager to secure the nearly 40 percent they do not own. The takeover has encountered resistance from two of Scania's minority owners, however. Both insurance outfit Skandia and pension fund AP4 have expressed reservations about selling up to Volkswagen.

“Scania’s prerequisites to maintain its leading position are better as a listed company than as a subsidiary in a larger group. Skandia doesn't intend to accept the offer," Caroline af Ugglas, head of equities at Skandia, told Bloomberg over the weekend.

Scania, which was founded in 1891 and has operations in more than 100 countries, boasts 38,600 employees. Around 16,000 work with sales and servicescross the company's subsidiaries, and over 12,000 work in production units. The company has headquarters in the Swedish town of Södertälje, where almost 6,000 employees work. The headquarters also hosts the research and development operations, with 3,300 employees.

"Changing owners won't make any difference to us in the near future," assembly line worker Ahmed said. "But we do wonder if the rules will change later on."

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