Activist investor CIAM has expressed cynicism over the recent settlement agreement between SCOR and Covéa, who have elected to renew their relationship after failed takeover talks led to a string of accusations and investigations.
SCOR is preparing to undergo a leadership transition at the end of June, when Laurent Rousseau will take over from Denis Kessler as CEO.
But CIAM has questioned the selection process and urged SCOR to push Kessler out of his remaining Chairman position in 2022, having previously levelled numerous criticisms regarding his level of power influence, as well as his remuneration.
And now, the investor says that the settlement with Covéa represents Kessler “strengthening his position by neutralising his main shareholder.”
“We see that SCOR’s majority shareholder is now forced to vote in favour of the resolutions proposed by the Board of Directors, including on the appointment of Directors, and to oppose any other resolution not approved by the Board,” CIAM wrote.
“As such, we will remain very vigilant on SCOR’s governance.”
Additionally, CIAM raised suspicions about the timing of the agreement, which was announced just a few days before SCOR’s Annual General Meeting.
“As a shareholder who considers governance to be a key element of the company and its valuation, we continue to call on shareholders to vote against the resolutions concerning the renewal of directors, as well as against Denis Kessler’s remuneration (chaotic succession and remuneration disconnected from the company’s performance),” the firm stated.
Despite its criticisms, CIAM did however welcome the potential positive impact of the SCOR/ Covéa settlement on Paris as an international financial centre.
The key points of the settlement agreement include: Implementation of an orderly exit by Covéa from the share capital of SCOR; Restore peaceful relations in order to move forward; Enable SCOR to redeploy its capital towards P&C (re)insurance and Covéa to accelerate its development strategy towards Life reinsurance, through SCOR’s retrocession of reinsurance portfolios; Settlement Agreement; and Communication.
The saga between SCOR and Covéa has been ongoing for quite some time. Most recently, Covéa filed on behalf of SCOR a complaint against its Chief Executive Officer (CEO), Denis Kessler, with the Parquet National Financier, which SCOR had refuted and condemned.