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.