Converium’s management fired another salvo in its ongoing battle to prevent a takeover by France’s SCOR Group (See IJ web site April 16). The Swiss-based reinsurer has filed a lawsuit in the U.s. Court for the Southern District of New York against SCOR and Patinex, AG its Swiss affiliate, alleging violations of U.S. securities laws.
Specifically, Converium alleges: “that the defendants violated Sections 13(d), 14(d), and 14(e) of the Securities Exchange Act of 1934, as amended, because, among other things, (i) SCOR has unlawfully and unfairly excluded Converium’s United States shareholders, a group which we believe represents approximately 22 percent of Converium’s outstanding shares, from participating in SCOR’s unsolicited tender offer, and (ii) defendants failed to make proper disclosures in connection with their purchase and ownership of Converium securities.”
SCOR, who acquired 32.9 percent of Converium’s shares (See IJ web site Feb. 19), launched a hostile takeover bid to acquire the remaining shares for around CHF3.1 billion ($2.54 billion) (See IJ web site Feb. 27). The offer, however, contained the usual exclusionary language concerning securities sales that have not been registered in the U.S., Japan, Australia and other countries that require such registration. SCOR also plans to “deregister,” or delist, its shares on the New York Stock Exchange and acquire a secondary listing (in addition to its French one) on the Swiss Exchange.
Converium’s lawsuit appears to be based on the exclusion. The Company said it is “seeking an expedited discovery and briefing schedule so as to permit a hearing on a motion for preliminary injunction prior May 22, 2007, which (unless extended) is currently the last date on which Converium shareholders may tender shares in connection with SCOR’s unsolicited tender offer.”
Converium also said that it is “seeking an order enjoining SCOR from consummating the offer until SCOR and Patinex have complied with their obligations under the Williams Act, including SCOR extending the offer to Converium’s United States shareholders and ADS holders.”
If Converium is successful, SCOR could be required to register the securities it proposes to issue and exchange as part of its purchase offer with the SEC. This would not only make the offer more expensive and complicated, but would also delay the closing date, which is now set for April 26.
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