ScotAm ready to name its preferred bidder
Tuesday 25 March 1997
The ScotAm board has to choose between the Pru, Abbey National and the Australian-based AMP by the end of the month. Analysts said a decision is unlikely to be announced on Good Friday, the Easter weekend or Easter Monday.
It is now clear that the initial decision will only name the preferred bidder. Unless the other bidders give permission details of the rival offers will not be published until the ScotAm board's formal circular is sent to members for approval, and that could be up to two weeks after the initial announcement.
That opens up the possibility of an argument over whether the best bid has been chosen.
ScotAm's advisers, SBC Warburg, have continued to insist that the winning bidder may not necessarily be the one with the highest headline figure, because of difficulties in comparing like with like.
The Prudential's initial offer was valued at pounds 2.2bn but this included a pounds 1.5bn loan to the ScotAm life fund. That would help it invest more profitably in the long run but would not have the same appeal to policyholders as a large cash bonus or allocation of shares.
The final bids, made under conditions of secrecy, may however have narrowed these differences.
AMP admits to being the outsider because it is Australian-based and still a mutual insurer, although it is the most determined to expand its European operations through a takeover and is unlikely to be the lowest bidder. It is, however, making contingency plans to launch a bid elsewhere if it fails to win ScotAm.
Abbey National was the first to show its hand and already has a strong Scottish presence through the ownership of the Scottish Mutual.
Last the week the City gave Abbey the dubious privilege of installing it as favourite to win through an overpriced offer and responded by selling Abbey National shares. They were down 8.8 per cent, and the Prudential 6.4 per cent, but over the weekend the Prudential was installed as slight favourite.
Shares in the Pru fell a further 3.5 per cent yesterday, partly on fears that insurers would be saddled with the cost of American tobacco companies compensating smokers.
The Independent's live blog of today's Premier League action
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- 3 Kim Kardashian 'nude pictures' leaked on 4chan weeks after Jennifer Lawrence 'The Fappening' scandal
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- 5 Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
Stamford Hill council removes 'unacceptable' posters telling women which side of the road to walk down
Kim Kardashian 'nude pictures' leaked on 4chan weeks after Jennifer Lawrence 'The Fappening' scandal
Iranian blogger found guilty of insulting Prophet Mohammad on Facebook sentenced to death
4Chan naked photos leak: Celebrity Twitter reactions to the mass breach of privacy
Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Scottish independence referendum: A nation divided against itself
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
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Archbishop of Canterbury admits doubts about existence of God
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