Following weeks of hullabaloo originating from SCOR’s unanimous rejection of a proposal from its largest shareholder Covéa, the two firms have spoken out to clarify their respective sides of the argument – and it looks like we haven’t heard the end of it.
First off, Covéa chair and chief executive Thierry Derez (pictured) won’t be serving in his capacity as member of SCOR’s board of directors. However, each camp has a different take on the issue.
In SCOR’s view, the Covéa CEO is in a general conflict of interest situation and must respect his commitment to resign under the internal regulations of the reinsurer’s board. SCOR went on to say that “the procedure and the methods used by Thierry Derez and Covéa to prepare, submit, and make public the combination proposal of August 24, 2018, as well as their renewed expressions of interest, can only be considered as hostile and unfriendly, and are significantly disrupting the functioning of the company.”
Meanwhile Covéa, for its part, said it made the information public to ensure a properly informed market. The French insurance group – on the same day its sale of UK personal lines broker Swinton Group Limited was announced – also stated that it “regrets the lack of discussions with SCOR and the attacks targeted against Covéa.”
As for its chief executive’s SCOR board membership, Covéa said: “In the interest of serenity and appeasement, Thierry Derez decided to temporarily withdraw from the board of directors of SCOR until the annual shareholders’ meeting to be held in 2019.”
In response, the independent global reinsurer slammed the statement.
“SCOR clarifies that Thierry 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,” it said. “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.”
The company also “formally contests Covéa’s allegation that it has been the target of ‘attacks’.” According to SCOR, its decision to reject the proposal was purely based on an appraisal of its own corporate interests and contained no element of criticism of Covéa.
Earlier this month asset manager CIAM, which manages two investment funds with stakes in SCOR, wrote to the latter’s chair and CEO Denis Kessler, in apparent disapproval.
“I believe that your refusal to engage in any discussions with Covéa means that you are not able to fully appreciate whether the offer could be in the corporate interest of SCOR,” expressed CIAM president Catherine Berjal in the letter seen by Insurance Business. “Your decision to reject the proposal is based on general considerations such as SCOR’s independence, but seems to reflect a desire from SCOR’s board of directors to be independent from its shareholders, which is clearly not acceptable.”
A French version was sent to Kessler, who has since countered the concerns raised by CIAM.
Covéa’s offer, which it withdrew following SCOR’s refusal to enter into discussions, involved a price of €43 per share.
