“It is clear that Old Mutual could become Skandia’s principal shareholder, under the condition that Old Mutual receives approval in the outstanding regulatory matters,” Skandia’s board said in a statement.
The company added however that it “has a large number of shareholders who have not accepted the offer. It is thus clear that Skandia will continue to be a listed company.”
The comments came a day after Old Mutual announced that investors holding 62.5 percent of Skandia’s shares had accepted its hostile takeover bid, but that it would extend the deadline for its 4.8-billion-euro offer by three weeks to January 12, 2006.
“I am delighted that holders of a majority of shares in Skandia have recognized the exciting potential of combining our two companies,” said Old Mutual chief executive Jim Sutcliffe, adding that “I look forward to welcoming every member of Skandia’s staff around the world to the Old Mutual family.”
If the deal goes through, the merged companies will become the eighth largest insurance group in Europe.
“Since the acceptance period has been extended for an additional three-week period, the definitive extent of Old Mutual’s acquisition pursuant to the offer cannot be determined until after the expiration acceptance period,” Skandia’s board said defiantly.
“Skandia shareholders will continue to have the right to withdraw tendered shares during the extension period … Skandia will continue to be governed as an independent entity as long as there are minority shareholders still holding shares in Skandia,” it insisted.
On December 1, Old Mutual slashed its target level of shareholder support in the bid, which is overwhelmingly backed by its own shareholders, to 50 percent from 90 percent.
Although the company has easily passed its new target, the 62.5 percent of Skandia shares it currently holds fall short of the 67 percent it would need to replace the Skandia board.
Analysts however say there is little doubt that the bid will succeed.
“Old Mutual will end up with more than 62.5 percent, because it will be tax beneficial for shareholders to sell in January … Eventually they will have a definite majority,” Cheuvreux Nordic analyst Frederik Gutenbrent told AFP.
“I don’t see any upside to sit in the minority if you represent only 15 or 20 percent … The stock will not be liquid,” he added.
Old Mutual lodged its hostile offer in September for 43.60 kronor per Skandia share, valuing Skandia at 44.9 billion kronor.
The offer deadline was initially set for November and had been prolonged to December 16 before the latest extension.
Following the Skandia statement on Wednesday, the Swedish company saw its stock inch up 0.22 percent to 46.50 kronor per share in morning trading.