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Old Mutual "has enough support for Skandia bid"

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11:46 CET+01:00
Anglo-South African insurer Old Mutual, whose hostile takeover bid for Skandia closes on Friday, is likely to have won the 50 percent shareholder support it needs to take control of its Swedish rival, analysts said.

But Old Mutual is still likely to extend its offer period until mid-January, a Swedish newspaper reported Friday, quoting an Old Mutual spokesman.

"There is a very high probability that they will achieve more than 50 percent," Thomas Johansson, analyst at Enskilda Securities, told AFP. "We can be sure it will be somewhere between 50 and 90 percent."

Old Mutual on December 1 slashed its target level of shareholder support in the bid, which is being resisted by Skandia's board, to 50 percent from 90 percent.

The takeover offer, worth 4.8 billion euros (45.4 billion kronor), would not be extended beyond Friday if the 50 percent target was not met, it said at the time.

"I think in the end, they are going to be well over 50 percent," Mikael Hallaaker at Handelsbanken Capital Markets told AFP.

Shareholders have until midnight Friday to pledge their holdings to Old Mutual. Analysts said this meant that the official result of the bid would be announced early next week, but the Dagens Nyheter daily said Friday that Old Mutual would extend the offer one more time, until mid-January.

It quoted Old Mutual spokesman Anders Fogel as saying that this would bring the offer period into line with the expected date of regulatory approval for the operation.

"To extend the offer would be one option we have against the background of the time it is taking to get approval from the authorities," he told the paper.

Regulatory approval is expected for mid-January, he said.

Analysts said an extension would give shareholders a shorter wait between the bid closing and a green light from the authorities.

"I wouldn't be surprised if they prolonged the acceptance period until maybe the end of the year," said Hallaaker.

Old Mutual has denied press reports 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.

AFP

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