Old Mutual cuts Skandia shareholder support requirement

Anglo-South African insurer Old Mutual said on Thursday that it has slashed the target level of shareholder support to 50% for its takeover bid for Swedish rival Skandia.

“Old Mutual announces that it has partially waived the condition relating to the level of acceptances required under its offer … from 90% to more than 50% of the total number of shares and votes in Skandia,” the group said in an official statement.

The takeover offer, worth 4.8 billion euros, would not be extended beyond December 16 if the new target was not met.

“Our own shareholders have demonstrated their overwhelming support for this transaction,” added Old Mutual chief executive Jim Sutcliffe.

“A significant number of Skandia’s shareholders remain equally supportive. Therefore we are accelerating the offer process by clarifying the acceptance level we require by December 16.”

Old Mutual remained “utterly committed to bringing this transaction to a close as soon as possible”, he added.

The group said all other terms of its offer, worth about 44 Swedish kronor per share, remain unchanged.

In reaction, Old Mutual saw its share price dip 0.17% to 151 pence in morning London trading, while the capital’s FTSE 100 index of leading shares rose 0.50% to 5,450.50 points.

Skandia shares jumped 1.58% to 45 Swedish kronor, while the OMX Stockholm 30 Index advanced 0.85% to 918.95 points.

Old Mutual had last week denied a press report that it was considering raising the offer.

The group’s own shareholders have overwhelmingly backed the bid which is aimed at reducing the insurer’s dependence on South Africa and at creating the eighth-biggest insurance group in Europe.