View more on these topics

Old Mutual raises stakes with 3.3bn Skandia bid

Old Mutual has finally tabled a 3.3bn bid for Skandia after a pursing the company for several months.

The offer is higher than the 3.1bn that the South African-based Old Mutual said it was prepared to pay earlier but still not enough to secure a Skandia board recommendation.

The offer would be paid for by a mix of 40 per cent cash and 60 per cent equity. It represented a 27 per cent premium on Skandia’s 250p share price when Old Mutual first announced its interest in May but Skandia equities have since traded up to the offer price of 303p a share.

A merger between the two, would create the world’s eighth-biggest insurer, with a market cap of 7.9bn. It is understood that the Skandia brand would be retained, at least, in the medium-term.

Old Mutual’s offer is cond-itional on the bid gaining board approval by Septem- ber 23 but has so far only garnered support from just over 15 per cent of the Scandinavian firm’s shareholders, implying a mixed reaction to the proposal.

Old Mutual chief execu- tive Jim Sutcliffe claims the merger would bring an initial 70m cost saving and further savings could be made thr- ough the outsourcing of some functions overseas.

The Skandia and Selestia platforms are likely to be merged if the deal goes ahead, dependent on an internal review that would take place next January.

Sutcliffe says: “We have the support of more or less 17 per cent of shareholders so far but the offer is compelling and I am hopeful that everyone will see it in the same light.”

A Skandia spokesman says the board is evaluating the offer.

A note on the offer from specialist financial services analyst Keefe, Bruyette & Woods says: “The only area of considerable overlap is the UK. This offers the most cost synergies but is also poten- tially the most contentious. Skandia Life has a well established and well-respected culture in its Southampton-based operation.

“Old Mutual will have to be very sensitive when extracting synergies at every level of this business.”

Recommended

Man adds two classes to its hedge portfolio

Man Investments has added euro and dollar share classes to its Man-IP 220 fund of hedge funds, giving investors alternative routes to access the capital-protected hedge fund portfolio.

FSA approves Britannic merger

The merger of Britannic Group and Resolution Group has been appro- ved by the FSA. The new closed life fund consolidator will now be called Resolution plc.

ABI changes data performance rules

The ABI is changing its rules under which providers of investment funds in the life and pensions sector report their past performance data to ensure each fund appears just once in performance tables.

Thumbnail

Case study: administration — implementing a management log

Our client is a leading video game and publishing company best known for its console role-playing game franchises. The client provides a number of benefits, at varying levels and cost that attract a P11d liability. With the absence of a management log to track data for benefit movements, enormous administrative and therefore cost implications were occurring each year just to comply with P11d reporting requirements.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com