21st Dec 2005 15:30
Old Mutual PLC21 December 2005 Old Mutual plc This announcement and the information contained herein are restricted and are not for release, publication or distribution, in whole or in part, in or into the United States, Canada, Australia or Japan. Old Mutual's offer for Skandia - Final Confirmation of Acceptance level Old Mutual plc ('Old Mutual') is pleased to confirm that acceptances of itsOffer have now been validated in respect of 662,557,994 shares in Forsakringsaktiebolaget Skandia (publ) ('Skandia') representing approximately 64.28 per cent of the total number of shares and votes in Skandia (on a fully diluted basis). The Offer for Skandia has been extended and will remain open foracceptance until 12 January 2006. Jim Sutcliffe, Chief Executive of Old Mutual, said: "I'm pleased by the number of smaller shareholders who elected to take shares inthe enlarged group. We now look forward to working with the Skandia Board tomake the necessary arrangements to move forward." More detailed information on the Mix and Match Facility, tax implications andsynergy benefits is contained in the attached appendices. 21 December 2005 ENQUIRIES: Old Mutual plcMalcolm Bell - Investor Relations +44 (0) 20 7002 7166Miranda Bellord - Media Relations +44 (0) 20 7002 7133 College HillAlex Sandberg +44 (0) 20 7457 2020Tony Friend +44 (0) 20 7457 2020 For further information about Old Mutual plc visit www.oldmutual.com Appendices 1. Mix and Match FacilityIncluded in the valid acceptances submitted in relation to the acceptance periodthat expired on 16 December 2005 were acceptances in respect of 49,971,559Skandia shares received from shareholders electing for the basic offerproportions of shares and cash, and acceptances in respect of 612,586,435Skandia shares received from shareholders electing under the Mix and MatchFacility. Of those Skandia shares submitted under the Mix and Match Facility, atotal of 8,255,971 Skandia shares were elected for settlement in cash, and atotal of 604,330,464 Skandia shares were elected for settlement in Old Mutualshares. Accordingly, for shareholders who elected to tender a higher proportionof their Skandia shares in exchange for the Share Consideration under the Mixand Match Facility, it is expected that approximately 0.4 per cent. of thoseSkandia shares tendered over and above the standard proportions will besatisfied in accordance with the basic offer proportions. Shareholders who elected to tender a higher proportion of their Skandia sharesfor the Cash Consideration under the Mix and Match Facility, will receive theirelection in full. Skandia shareholders who held in aggregate 1,000 or lessSkandia shares on 1 September 2005 and tendered their Skandia shares by 16December 2005 and who elected to receive cash only under the special guarantee,will receive Cash Consideration for all their shares. The exact proportions of cash and shares to be received under the Mix and MatchFacility (other than under the Cash Guarantee) is subject to valid acceptancesnot being withdrawn prior to the Offer becoming or being declared unconditionalin all respects, and a definitive figure will be announced at that time. Aworked example illustrating the treatment of shareholders under the Mix andMatch Facility is set out below. For example, for three shareholders each holding 100,000 Skandia shares: Election 1 Election 2 Election 3- for shares - for cash - for shares - for cash - for shares - for cash 100,000 0 80,000 20,000 0 100,000Allocation 1 Allocation 2 Allocation 3- of shares - of cash - of shares - of cash - of shares - of cash 60,857 39,143 60,777 39,223 0 100,000 Note: "Allocation" denotes the number of Skandia shares to be settled with theShare or Cash Consideration. 2. Tax - information to Skandia shareholders resident in SwedenThe following summary of certain tax consequences that may follow from acceptingOld Mutual's Offer is based on current Swedish tax legislation and is onlyintended as general information for shareholders who are resident or domiciledin Sweden for tax purposes. Each shareholder is recommended to consult a taxadviser for information with respect to any tax consequences that may arise as aresult of the Offer. Skandia's shareholders resident in Sweden will be deemed to have disposed oftheir Skandia shares when there is a binding agreement between Old Mutual andthe Skandia shareholder. In a public offer, a binding agreement between theofferor and a selling shareholder who has previously accepted the offer isconstituted when the offeror - in this case Old Mutual - has declared the offerunconditional. As Old Mutual has not yet declared the offer unconditional, Skandia shareholderswill be deemed to have disposed of their shares in 2006 for Swedish capitalgains tax purposes unless the Offer is declared unconditional before then. 3. Synergy Benefits Although as at 16 December 2005 Old Mutual had received acceptances in respectof approximately 64.28 per cent. of Skandia shares, the Offer has been extendeduntil 12 January 2006 to allow for regulatory approvals to be achieved, duringwhich time additional acceptances may be received. Owning and managing a majority interest in a business, without wholly owning it,is a proven part of Old Mutual's model, as the Old Mutual Group includesmajority stakes in Nedbank and Mutual & Federal. The synergies arising from acombination of Skandia and Old Mutual identified in the Prospectus dated 7October 2005 assumed that Old Mutual would acquire 100 per cent. of the issuedshare capital of Skandia. Different levels of shareholding allow differentlevels of control and different synergy benefits. The main examples are set outbelow. At above 50 per cent. Old Mutual is able under Swedish law to appoint boardmembers and these board members may influence the board strategy. In thiscontext it should be noted that Skandia's listing agreement with the StockholmStock Exchange and the Swedish Corporate Governance Code require that a majorityof the board must be independent from Skandia and its management, and that atleast two of these board members are independent from any shareholder with morethan 10 per cent. of the shares or votes in Skandia, and one of the functions ofthis board is to ensure that any action taken by Skandia will be in the interestof all shareholders. Once Old Mutual's ownership is at a level of 66.67 per cent., under Swedish lawit will have the right to change Skandia's articles. The 75 per cent. threshold is not relevant in Swedish law but is relevant for UKtax purposes since that is the threshold at which Old Mutual will be able totreat UK subsidiaries of Skandia as part of its UK tax group which will enableit to offset losses that arise in Old Mutual's UK subsidiaries after thethreshold has been reached with profits that arise in those Skandia subsidiariesafter the threshold has been reached, or vice versa. The 75 per cent. thresholdis however relevant for the Stockholm Stock Exchange's listing rules - asSkandia may be required to move its shares from the A list to a more juniorlist, for example the O List (as the A list has 25 per cent. free floatrequirement). A holding of 90 per cent. in Skandia would allow Old Mutual to initiate minoritysqueeze-out proceedings under Swedish law, and then de-list Skandia.At levels of share ownership in Skandia below 100 per cent., the synergies willbe lower than those set out in the Prospectus but they will remain significant.Owing to uncertainty as to the ultimate level of acceptances that will beachieved and the timing and extent of the synergy benefits that will arise, OldMutual is unable to quantity the exact synergy benefits. However, the Old MutualBoard believes that a majority of those synergy benefits will be achieved atacceptance levels down to 50 per cent. (1) (1) The synergy benefits relate to future actions and circumstances which, by their nature, involve risks, uncertainties and other factors. Because of this, synergy benefits referred to may not be achieved, or those achieved could be materially different from those estimated. Please see also the risk factor "Old Mutual may complete the Transaction at a level of acceptances which does not allow a compulsory acquisition by Old Mutualof the remaining Skandia shares" on page 21 in Part II of the Prospectus whichapplies equally to information contained in this press release. Deutsche Bank, which is authorised by Bundesanstalt furFinanzdiensleistungsaufsicht (BaFin) and by the Financial Services Authority andis regulated by the Financial Services Authority for the conduct of UK business,is acting for Old Mutual plc and no one else in connection with the Transactionand will not regard any other person (whether or not a recipient of thisannouncement) as its client in relation to the Transaction and will not beresponsible for providing the protections afforded to its clients nor for givingadvice in relation to the Transaction or any transaction or arrangement referredto, or information contained in this announcement.Merrill Lynch International is acting for Old Mutual plc and no one else inconnection with the Transaction and will not regard any other person (whether ornot a recipient of this announcement) as its client in relation to theTransaction and will not be responsible for providing the protections affordedto its clients nor for giving advice in relation to the Transaction or anytransaction or arrangement referred to, or information contained in thisannouncement.Lazard & Co., Limited is acting for Old Mutual plc and no one else in connectionwith the Transaction and will not regard any other person (whether or not arecipient of this announcement) as its client in relation to the Transaction andwill not be responsible for providing the protections afforded to its clientsnor for giving advice in relation to the Transaction or any transaction orarrangement referred to, or information contained in this announcement.The Offer, all acceptances and withdrawals thereof or pursuant thereto and allcontracts made pursuant thereto and action taken or made or deemed to be takenor made under any of the foregoing shall be governed by and construed inaccordance with Swedish law.The Offer is, subject to certain exceptions, not being made, directly orindirectly, in or into the United States, Canada, Australia, Japan or any otherjurisdiction where to do so would constitute a violation of the laws of suchjurisdiction, or by use of the mails or by any means or instrumentality(including without limitation, facsimile transmission, telephone and theinternet) of interstate or foreign commerce, or any facility of a nationalsecurities exchange, of the United States, Canada, Australia or Japan.Accordingly, copies of this announcement or any accompanying documents are notbeing, directly or indirectly, mailed or otherwise distributed, forwarded ortransmitted in, into or from the United States. Any persons receiving suchdocuments (including, without limitation, custodians, nominees and trustees)should observe these restrictions and should not, subject to certain exceptions,mail or otherwise distribute, forward or transmit them in, into or from theUnited States or any other jurisdiction where to do so would constitute aviolation of the laws of such jurisdiction, or use such means, instrumentalityor facility in connection with the Offer, and so doing may render invalid anyrelated purported acceptance of the Offer. Any persons (including, withoutlimitation, custodians, nominees and trustees) who would or otherwise intend to,or may have a contractual or other legal obligation to, forward thisannouncement or any accompanying documents to the United States should seekappropriate advice before taking any action.These materials are not for distribution, directly or indirectly, in or into theUnited States. They are not an offer of securities for sale into the UnitedStates. There will be no public offer of the Old Mutual shares in the UnitedStates.The New Old Mutual shares have not been, and will not be, registered under theUS Securities Act of 1933 (the "Securities Act") or with any securitiesregulatory authority of any state or other jurisdiction of the United States orunder the applicable securities laws of Canada, Australia and Japan.Accordingly, subject to certain exceptions, the New Old Mutual shares may not beoffered or sold within the United States or Canada, Australia and Japan or anyother jurisdiction where to do so would constitute a violation of the laws ofsuch jurisdiction, or to or for the account or benefit of any person in theUnited States, Canada, Australia or Japan.This announcement includes forward-looking statements about Old Mutual, Skandiaand the Enlarged Group. By their nature, forward-looking statements involverisks and uncertainties because they relate to events and depend oncircumstances that may or may not occur in the future. Old Mutual cautions youthat forward-looking statements are not guarantees of future performance and theOld Mutual Group's actual results of operations, financial condition andliquidity, and the development of the industry in which the Old Mutual Groupoperates may differ materially from those made in or suggested by theforward-looking statements contained in this document. Events that may causeactual results to differ from such forward-looking statements include, but arenot limited to: fluctuations in the capital markets; fluctuations in interestrate and exchange rates; increased regulation or regulatory scrutiny; theoccurrence of unforeseen disasters or catastrophes; political or economicinstability in their principal markets; adverse outcomes in litigation; andfailure to achieve the benefits of the proposed Transaction. Theseforward-looking statements speak only as at the date of this announcement.Except as required by the UK Listing Authority, the London Stock Exchange orapplicable law, Old Mutual does not undertake any obligation to update or revisepublicly any forward-looking statement, whether as a result of new information,future events or otherwise. Except as required by the UK Listing Authority, theLondon Stock Exchange or applicable law, Old Mutual expressly disclaims anyobligation or undertaking to release publicly any updates or revisions to anyforward-looking statement contained herein to reflect any change in Old Mutual'sexpectations with regard thereto or any change in events, conditions orcircumstances on which any such statement is based. In addition, even if the OldMutual Group's results of operations, financial condition and liquidity, and thedevelopment of the industry in which the Old Mutual Group operates areconsistent with the forward-looking statements contained in this announcement,those results or developments may not be indicative of results or developmentsin subsequent periods.To the extent permissible under applicable law or regulation, and in accordancewith normal Swedish market practice, Old Mutual or its brokers (acting asagents) may from time to time make certain purchases of, or arrangements topurchase, directly or indirectly, Skandia shares or any securities that areimmediately convertible into, exchangeable for, or exercisable for, Skandiashares, other than pursuant to the Offer, before, during or after the period inwhich the Offer remains open for acceptance. These purchases may occur either inthe open market at prevailing prices or in private transactions at negotiatedprices. Any information about such purchases will be disclosed as required bylaw or regulation in Sweden or other relevant jurisdictions. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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