Skandia profits strengthen independence claims

Swedish insurer Skandia, the target of a hostile takeover bid by Old Mutual, said on Tuesday that strong third-quarter earnings strengthened its resolve to remain independent.

Skandia’s net profit increased by 10.5% to 346 million Swedish kronor (42.3 million dollars, 36.1 million euros) and pre-tax profit nearly doubled to 398 million kronor.

Operating profit, calculated according to the so-called embedded value method, came in at 2.27 billion kronor, more than three times what it had been a year earlier.

This was well ahead of market expectations of 1.74 billion kronor, according to analysts polled by SME Direkt.

“Our excellent result performance further strengthens our conviction that Skandia as a standalone company is a very attractive investment proposition for our shareholders,” chief executive Hans-Erik Andersson said in the statement.

Andersson is an outspoken opponent, along with most of his fellow board members, of an unsolicited takeover bid lodged in early September.

The offer values Skandia at 44.9 billion euros and would, if successful, lead to the creation of Europe’s eighth-largest insurer.

Skandia’s results announcement came a day after Old Mutual delayed by almost a month the closing date of its offer for Skandia, which will now expire on December 16 instead of November 21.

But Old Mutual’s finance director Julian Roberts also insisted that it would not improve its offer.

“We don’t intend to increase the price. We believe the price we have offered is fair,” he told reporters.

Old Mutual has said that it wants a 90-percent support level from the Swedish group’s shareholders.