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.”
Cavendish Asset Management
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.
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.
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.
Holly Cassell, Assistant Manager of the top-performing Neptune UK Mid Cap Fund, discusses the potential near-term impact of Article 50 and the Brexit negotiations that she believes investors should pay most attention to. Read article here Important information Investment risks Neptune funds may have a high historic volatility rating and past performance is not a […]
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