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SKANDIA

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.

TAKEOVER

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." 

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