SCOR calls Covéa renewed takeover approach ‘hostile and unfriendly’
The procedure and the methods used by Covéa CEO Thierry Derez and Covéa to take over SCOR as well as their renewed expressions of interest after the bid has been rejected, “can only be considered as hostile and unfriendly, and are significantly disrupting the functioning of the company,” SCOR said in a corporate statement while insisting that Derez should resign from SCOR’s board.
French mutual insurance company Covéa, whose €8.2 billion bid for SCOR was rejected earlier in September, said on Sept. 27 that it was still seeking a friendly takeover of the reinsurer.
Covéa, which already owns about 8.5 percent of SCOR, offered in late August to pay €43 per SCOR share, valuing the company at about €8.2 billion.
However, SCOR's board of directors determined that the offer was fundamentally incompatible with SCOR's strategy of independence, which is a key factor of its development, and 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. As a result of the refusal Covéa withdrew its offer.
In its latest statement, Covéa proposes to support SCOR allowing for substantial managerial autonomy with a board of directors composed of a significant number of independent directors.
Covéa also confirmed that it wishes to maintain SCOR’s listing with a large free float in order to preserve its visibility in the financial markets. SCOR would therefore benefit from a strong and stable shareholder respectful of its identity and capable of supporting its development projects, according to Covéa.
But in its latest statement, SCOR said that “the fundamental reasons, including those relating to the intrinsic and strategic value of SCOR, which led the board of directors' meeting of Aug. 30, 2018 to unanimously reject Covéa's proposal, remain fully applicable.”
Consequently, the SCOR board of directors' meeting of Sept. 21, 2018 decided, unanimously, to affirm in all respects its decision of Aug. 30, 2018 to refuse to enter into discussions with Covéa.
Covéa is bound by a standstill agreement prohibiting it from exceeding, directly or indirectly, the threshold of 10 percent of SCOR's share capital until April 7, 2019.
Derez decided to temporarily withdraw from the board of directors of SCOR until the annual shareholders’ meeting to be held in 2019. However, SCOR wants him to resign completely.
On Sept. 6 SCOR CEO Denis Kessler has sent a letter to Derez, asking him to resign from his position as a SCOR board member because of a conflict of interest.
SCOR said that its “Règlement intérieur” (internal regulations) requires that any board member in a situation of conflict of interest must resign from the board, within one month of being formally notified of the conflict of interest.
In compliance with the group’s governance procedures and “Règlement intérieur”, SCOR asked to respect his obligations and resign from the board at the earliest opportunity.
SCOR noted that Derez serves on SCOR's board of directors as an individual and that Covéa is therefore not positioned to speak on his behalf in this regard. Moreover, the concept of a "temporary withdrawal" of a director is not set out by law or by SCOR's bylaws or the Internal Regulations of the Board of Directors.
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