Old Mutual gets backing for hostile takeover of Skandia

Old Mutual, the South African and London-listed financial services group, finally confirmed yesterday it had received enough support for its hostile takeover of Skandia, claiming to have acceptances from 62.5 per cent of shareholders.

Extending the deadline for acceptance for one last time - until 12 January - the company said it was ready to make its offer unconditional. Although Old Mutual hopes to receive the support of some of the rebel investors who opposed the bid, Julian Roberts, the finance director, said it would be happy with the deal even if it received no further acceptances.

"Ideally, we'd like to have a larger shareholding," he said, "but we own only 51 per cent of Nedcor [the South African bank], and we're comfortable with 62.5 per cent [of Skandia]. We have achieved the aim we set out to achieve." He added: "If you own less, you've paid less. With a majority stake, we can move the business forward, we can help the business grow. We would still like to get 90 per cent [acceptances] - and we haven't given up hope on that yet. We want to see where we get to."

The Swedish insurer said it would provide a formal reaction to Old Mutual's announcement today. Mr Roberts said he hoped this would involve an extraordinary meeting, in which Old Mutual would put new directors in place to manage the company. He said if Skandia did not oblige with this, Old Mutual would exercise its right as the largest shareholder to call a meeting when the transaction is completed.

Mr Roberts would not comment on whether any members of the Skandia board would be kept on, or whether the company's chief executive, a friend of Old Mutual's chief executive, Jim Sutcliffe, would be offered a position. Old Mutual hopes its acquisition of Skandia will lead it towards a significant stock market re-rating.

In the past, investors have been critical that it is in essence a South African company with a few smaller global operations. However, the acquisition of Skandia will give it a much stronger foothold in Europe, adding to its growing businesses in the UK and US.

Old Mutual shares have climbed almost 25 per cent since news of its pursuit of Skandia emerged in May.