Corporate Governance in Modern Financial Capitalism
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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.
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Chapter 15: A Divided Board

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


The Swedish media had been haunting Skandia directors and executives since 2002. From June 2005, however, the tone among many media slowly began to change. Around the same time, the focus turned towards the company as such – that is, to its current position and strategic options. Some media reports addressed the issue of a possible bid for Skandia from a ‘saviour’, and there was also speculation that a Nordic suitor, such as Nordea or Storebrand, would go for a part of Skandia. In August, this kind of discussion was replaced by a debate about whether it was right to sell Skandia at all. Things were also written about the stand-alone plan, and about suitors turning their back on Skandia. Most of these reports reflected material and views that had been provided by various Swedish institutional investors.1 15.1 THE FOURTH NATIONAL PENSION FUND STATES ITS POSITION In the last week of August 2005, both Old Mutual and Skandia received a first impression of how Skandia shareholders really looked upon an Old Mutual bid. They also became aware that many Swedish institutional investors actually opposed such a proposal. The first shareholder to openly state its position was the Fourth National Pension Fund (AP4). During a meeting between institutional shareholders and some of Skandia’s directors and its CEO in Stockholm on 23 August, Thomas Halvorsen, having been the CEO of AP4 since 1993, had asked critical questions and demonstrated his dislike both of the auction process and of Old Mutual as an indicative...

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