Report criticises Old Mutual bid

The Swedish Securities Council, which sets guidelines for takeovers, has issued a critical report on Anglo-South African insurer Old Mutual PLC's bid for Sweden's Skandia Insurance Co Ltd.

The Council’s 14-page report criticises Old Mutual for not explicitly mentioning that its bid was not recommended by the Skandia board in its “mini-prospectus” to Swedish shareholders. It said the omission was “not in accordance with best practice.”

The Council takes Old Mutual to task for claiming support for its bid from Swedish state pension fund AP2 in its offer documents. AP2 initially supported the Old Mutual offer, but subsequently changed its mind.

The Council also criticises Old Mutual for referring to its 400-page UK prospectus in the Swedish prospectus without making it available in full to Swedish shareholders.

The Council’s report comes in response to earlier comments issued by the Swedish Shareholders’ Association. A Skandia spokesman said it was rare for the body to criticise bidders during the course of an offer.

Old Mutual said it had complied with all the relevant rules.

“Old Mutual always takes every step to comply with local stock market regulations, and that has been the case here,” a spokesman said.

In September, Old Mutual tabled a cash and shares offer for Skandia valuing the Swedish insurer at about 3.28 bln stg. The Skandia board was divided over whether or not to accept.

The offer is open until Nov 21. Old Mutual has said it wants a 90 pct acceptance level.



Scania review board dissects Volkswagen bid

The independent committee looking at Volkswagen's take-over bid of Swedish truck giant Scania began its work on Tuesday, stating promises that headquarters would remain in Sweden were paramount.

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."