SCOR rumoured to face new takeover approach by Covéa

French cooperative insurer Covéa is working on a new approach to its planned takeover of reinsurer SCOR after its friendly €8.2 billion offer was rejected earlier in September, Reuters reported citing “two sources close to the deal”.

Covéa had proposed to acquire a majority stake in SCOR but the proposal was met with unanimous opposition from SCOR's executive committee.

On Aug. 30, 2018, SCOR's board of directors reviewed the terms and conditions of this unsolicited proposal in detail and determined that it is fundamentally incompatible with SCOR's strategy of independence, which is a key factor of its development, that it would jeopardize the group's strong value-creating strategy and that it reflects neither the intrinsic value nor the strategic value of SCOR.

SCOR has said that the company’s independence was part of its success story and that the offer price did not reflect the firm’s value.

In a second attempt, Covéa is reportedly seeking to convince SCOR’s board to accept a deal by offering to keep the firm listed.

A new bid would potentially be higher than the €43 a share originally offered, according to Reuters. Furthermore, Covéa would keep Scor independent with floating capital of at least 20 percent, one source reportedly said. “Covéa is ready to refloat a stake on the market after a takeover,” Reuters cited the source as saying.

Covéa may want to become a major actor on the European stage through the SCOR acquisition.

The insurer is already SCOR’s largest shareholder with an 8.5 percent share of the voting rights. Allianz Global Investors Europe is the second largest shareholder with 5.0 percent of voting rights. The Reuters article noted that Allianz could also be interested in bidding for the reinsurer.

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