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Old Mutual still holding out hope for Skandia deal

Old Mutual has again extended the deadline for Skandia shareholders to accept its offer and believes it is building the momentum to carry the deal through.

The South African insurer says 69.7 per cent of Skandia’s shareholders have accepted the bid, which is 5.3 per cent short of the 75 per cent threshold it requires to take over the company.

Old Mutual has extended the January 12 deadline until January 23 in an attempt to harness what it claims to be growing support.

The company extended its initial December deadline by a month after winning over 64.3 per cent of shareholders.

It says efforts to get regulatory approval for a take- over are continuing, with approval granted by Swedish financial regulators and pending in the UK.

Analysts say the extension could mean that Skandia’s foreign shareholders are more likely to accept the bid and sources close to Skandia in the UK say they feel that the bid has now gained the momentum to be successful.

Old Mutual says it may further extend the offer if necessary. If a takeover goes thr- ough, it would create Europe’s eighth-biggest insurer with a combined market capitalisation of 8bn.

Selestia, the fund platform owned by Old Mutual, and Skandia’s platform would no longer be in competition and could either continue as separate businesses or look to achieve economies of scale by merging.

Croydon IFA Formula director Mark Osland says: “I cannot see a company like Old Mutual getting this far without being determined to succeed and the bid seems to be building critical mass. Skandia’s profitability makes it an attractive bid target that would give Old Mutual a firm foothold in the UK market.”

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