AWG bought Morrison in 2000 and is now suing Fraser Morrison and another director for £130m for
Posted in General on 12. Oct, 2010
AWG bought Morrison in 2000 and is now suing Fraser Morrison and another director for £130m for performance failures. Bream said yesterday it would have to get to the bottom of six issues that may affect AWG’s value before it would make a firm offer. These include its pension fund deficit, which is about £129m, the planned £200m disposal of its international business, property sales, the company’s debt position, and its cash flow. Bream yesterday accused AWG’s board of stonewalling its approach, saying it had “refused to engage in formative discussions regarding value”. Francis Gugen, a director at Bream, said: “We believe this is a fully priced proposal. All we have asked for is the normal acceptance of access so we can get in to a position where we can make a bid.
The management have frustrated us, and it is time the shareholders were given the choice of a ready cash offer.”AWG said the major stumbling block to opening up discussions with Bream has been WestLB’s interest in Mid Kent Water. A bid by WestLB would lead to a water merger referral to the Competition Commission. This obstacle, according to WestLB, has now been removed after actions to dispose of its stake in the water firm. A statement from AWG yesterday said it had made “clear that it would be prepared to consider any proposal that was in the interests of its shareholders and was capable of being delivered without a mandatory reference to the Competition Commission”. After news from WestLB that this may be avoided, AWG said it was making arrangements to meet with the Office of Fair Trading to discuss the matter.. Standard Life, Europe’s largest mutual insurer, is facing a mutiny of its members to convert it in to a public company.
He must bide his time until July, when the three-year time restriction between demtualisation bids runs out. Standard fought off a demutualisation campaign in 2000, led by the Monaco-based fund manager Fred Woollard.Policyholders expecting bonanza windfalls, however, are likely to be disappointed. The value of the company has plummeted in the past three years, after heavy investment in equity markets throughout the bear market ravaged its spare funds. It had £11bn of surplus capital in 2000 that would have been available for distribution between policyholders. Standard now has only £700m over its solvency margin, and has had to use £1.5bn of future profits and £1bn of debt to stay above water with the regulator.
Listing on the stock exchange would allow Standard the opportunity to raise more capital for the business. Policyholders are likely to only receive shares in the company if it were to demutualise.”Support for the campaign has snowballed in the past few weeks,” Mr Stonebanks said. “The crock of gold is not as big as it once was, but there is still some value there for policyholders.” He plans to canvass support for his campaign at the company’s annual general meeting on Tuesday next week.Standard, which met with Mr Stonebanks at the end of March to discuss his campaign, maintains that mutuality remains in the best interests of members.It was thought that when Scott Bell, the chief executive in 2000 and stalwart of its mutual status, retired last year the firm would become more open to ending its mutual status. It has been member-owned since 1925.Standard cut policyholder payouts by an average 15 per cent last year.