September 18, 2018
French activist investment fund CIAM is placing pressure on Scor’s management team after the French reinsurer rejected a takeover offer from Covéa last month, according to reports.
Covéa, a French mutually owned insurance company which owns around an 8.5 percent stake in Scor, made a friendly EUR8.2bn approach for Scor in August.
However, in a statement confirming that it had turned down the offer, Scor said that the takeover was “fundamentally incompatible” with its strategy of independence 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”.
According to Reuters, CIAM has bought a 0.77 percent stake in Scor and has sent a letter the French reinsurer’s chairman and CEO Denis Kessler, asking him to engage in talks with Covéa regarding the takeover offer and also threatened legal action.
CIAM’s president, Catherine Bejral, said in its letter to Scor that the management was legally obliged to talk to Covea, Reuters said.
“I would not hesitate to hold you and the Board of Directors legally liable for a decision which would constitute gross management negligence,” she added.
In the letter, Bejral also asked Kessler to detail his proposals to boost the share price of Scor above the level offered by Covéa.
“I am eager to hear the measures that you plan to take to ensure that Scor’s share price reflects its intrinsic value, which, as your statement implies, should be well above 43 euros per share,”she said.
The news follows rumours that Covéa is continuing to look at new approaches to a potential acquisition of Scor.
Sources at Reuters said that Covéa is seeking to convince Scor’s board to accept a new deal by proposing a higher bid and offering to keep the firm listed.