Table of Contents

Corporate Governance in Modern Financial Capitalism

Corporate Governance in Modern Financial Capitalism

Old Mutual’s Hostile Takeover of Skandia

Markus Kallifatides, Sophie Nachemson-Ekwall and Sven-Erik Sjöstrand

This insightful book focuses upon corporate governance processes, and explores the conditions required for effective corporate governance and control in 21st century globalized and financialized economies. In presenting a comprehensive study of a cross-border hostile corporate take-over process, describing the actors, institutions and events involved, this book examines and questions the current forms of corporate governance and control – both from a national and a global perspective. Using Old Mutual’s takeover of Skandia as a case study, the authors address corporate governance theory, and highlight its two fundamental dimensions: financial and operational flows.

Chapter 16: A Controversial Bid

Markus Kallifatides, Sophie Nachemson-Ekwall and Sven-Erik Sjöstrand

Subjects: business and management, corporate governance, strategic management, economics and finance, corporate governance, financial economics and regulation, law - academic, corporate law and governance


OLD MUTUAL’S BID FOR SKANDIA Old Mutual’s Friday evening press conference in Stockholm on 2 September marked a turning point for a Skandia that, since the spring of 2003, had been subject to various takeover speculations. The same day, a public binding bid was presented to Old Mutual and Skandia shareholders as well as to the general public in Sweden, the UK and South Africa. This procedure ensured that all were given access to the same official documentation at the same time (the writings and handouts from 2 September 2005). On the previous Monday afternoon (29 August 2005), Old Mutual had confirmed that, for some time, it had held discussions with Skandia and a number of the company’s major shareholders concerning a possible offer where Skandia was valued at approximately 42 SEK per share. When the bid was formally announced, Old Mutual presented a value of 43.6 SEK per share: the difference reflecting a rise in Old Mutual’s share price during the week. On that Friday, the Skandia share was trading at 41.5 SEK. It continued to lose ground by a few öre1 each day. By 15 September, Skandia was trading at 40 SEK. This was far from the expectations marketed by Skandia Director Christer Gardell, and also far from the price indications that appeared when the Old Mutual bid speculations were confirmed on 13 May 2005. That day, Skandia rose to 42 SEK.2 Four months later, the Stockholm stock market had risen by 12 per cent and the Morgan...

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