Old Mutual “has enough support for Skandia bid”

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.



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."