The ongoing struggle between Finnish insurer Sampo PLC and the Norwegian government for control of Storebrand, Norway’s largest insurer, took a new turn on Friday when the country’s Banking, Insurance and Securities Commission (BISC) urged the government to block Sampo’s $2.34 billion bid.
The seesaw battle began when Sampo first tabled its offer last May, that topped a previous bid by Den Norske Bank, which is 47 percent owned by the government. While 86.3 percent of Storebrand’s shareholders have already accepted Sampo’s offer, Den Norsk with nearly 10 percent of the shares, has steadfastly refused to. Norwegian law requires 90 percent shareholder approval in such cases, and the BISC cited Sampo’s failure to pass this threshold as its reason to urge that the offer be rejected.
Despite a disclaimer that its move wasn’t inspired for nationalistic reasons, the BISC’s action was characterized by most analysts as exactly that. Norway, although not a member of the European Union, does belong to the European Economic Area, which requires free movement of capital. It’s been criticized for blocking the deal.
The government, which is facing a general election, isn’t expected to announce any decision before mid-September. Sampo’s management indicated that it will continue to pursue Storebrand, and confirmed that the deadline for shareholders to accept its offer, which has already been extended three times, remains September 28.
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