French insurers in spat over ditched bid for Scor

Paris-based reinsurer Scor is taking legal action against Covéa, as well as its rival’s chief executive and its advisers after the mutual insurer on Tuesday dropped controversial plans for a takeover.

“Scor just learned with great surprise and astonishment that, during market operating hours, Covéa issued a press release stating that ‘a transaction with Scor is no longer part of its strategic options’,” Scor said in a statement.

The reinsurer added that it would be bringing the matter to the attention of the French markets regulator, the AMF.

Covéa, which is Scor’s largest shareholder with an 8 per cent stake, first made its takeover interest public in September but the move was forcefully rejected by Denis Kessler, the reinsurer’s long standing chief executive.

Scor said in a press release on Tuesday that it planned to launch legal action against Covéa and its chief executive, Thierry Derez, for alleged “breach of trust” and “concealment of breach of trust” respectively. Mr Derez was on the board of Scor until November last year.

Scor is also pursuing a complaint against Covéa’s advisers, Barclays and Rothschild.

Covéa said it strongly denied all the allegations contained in Scor’s press release.

“Covéa will hold a board meeting tomorrow and reserves all rights to protect its interests in view of these serious and unfounded accusations which are harmful to its reputation,” it added.

Credit Suisse had been advising Covéa earlier in the process, but Scor said that it was “informed by Credit Suisse in November 2018 of its decision, for reasons of compliance with the laws and regulations in force, to withdraw its support for any plans by Covéa to take control of Scor.” The insurer said it commended “this decision by Credit Suisse, which is to its credit”.

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Earlier in the day, Covéa said it had taken “note of Scor’s refusal to enter into any discussions in relation to Covéa’s proposed friendly transaction offer addressed on August 24, 2018. The continued attacks and hostile tactics targeting Covéa since then have intensified in the last few days.”

“As a consequence, Covéa states that a transaction with Scor is no longer part of its strategic options,” added the French mutual insurer.

Shares in Scor dropped as much as 13 per cent in response to the news, wiping almost €1bn off its market capitalisation and taking them back towards the level they were trading at the beginning of September.

Scor said it strongly denied the claim by Covéa that there were “continued attacks and hostile tactics targeting Covéa”.

Covéa had said it would respect a standstill agreement not to take its stake above 10 per cent before April 2019 but had also said it regretted the “lack of discussion with Scor”. According to people familiar with the matter, the two sides have not discussed any potential deal in recent weeks and both CEOs remain at loggerheads.

Mr Kessler has previously ruled out a deal, saying that “there was absolutely no industrial project, no synergies”. Covéa announced its €43-a-share offer, which valued Scor at €8.2bn, in August.

Covéa, Barclays and Rothschild declined to comment.



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