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 18: A Hostile Bid

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


PUBLIC RELATIONS PROBLEMS Actors close to Old Mutual’s CEO heard Jim Sutcliffe express doubts about the entire Skandia deal two weeks after it was announced publicly. One Swedish investor startled him by asking what Old Mutual might do if ‘they’ – a group of opposing Swedish investors – gained control of 10 per cent of the shares. Similar questions indicated that Old Mutual’s marketing in Sweden had begun to lose momentum. Sutcliffe and CFO Julian Roberts complained about the performance of the Swedish PR team Kreab, which they thought was acting too passively, and had not tried hard enough to influence what the press had been writing. In mid-September, Kreab’s staff found itself caught in a difficult situation. From the very beginning (back in May) they had been informed that Old Mutual’s plan was quite straightforward: the Skandia board would recommend a public bid, and then the majority of the shareholders would accept it. While preparing for the deal, Kreab focused on its role as gatekeeper for Old Mutual. The PR firm arranged courteous meetings with ‘important people’ in Sweden (such as government officials, representatives of the Wallenberg family, leading opinion-makers and so on). During the summer, Kreab had the impression that Old Mutual and its investment banks were in control of the bid process and, according to its public opinion analyses, Skandia was not a company of national concern. Therefore the PR firm acted on that premise.1 Information personnel at Old Mutual’s office in London witnessed a heated debate in the...

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