Reinsurance News

Covéa board firmly rejects “groundless” SCOR accusations

31st January 2019 - Author: Staff Writer

After a statement from Covéa this week put an official end to its hopes of successfully navigating a takeover of SCOR, prompting the latter to pursue legal action, the company’s board of directors have firmly rejected what they describe as groundless acquisitions and reaffirmed its unanimous support for Thierry Derez.

coveaCovéa has said it will take all action in order to defend its interests in view of the “serious reputational harm resulting from SCOR’s unacceptable accusations, which are undoubtedly part of a strategy to manipulate the judicial process.”

The acquisition offer from Covéa, which is currently SCOR’s largest shareholder, was labelled as “hostile and unfriendly” by the reinsurer and resulted in the resignation of Thierry Derez from SCOR’s Board of Directors in November.

Covéa had previously planned to continue to pursue negotiations regarding a “friendly transaction” with SCOR, but announced this week that it was scrapping its plans due to “the continued attacks and hostile tactics targeting Covéa.”

SCOR denied these accusations and decided to bring the matter to the attention of the Autorité des Marchés Financiers (AMF) in light of “substantiated” doubts about the intentions and behavior of Thierry Derez and Covéa, it said.

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The company intends to prosecute Derez and Covéa for breach of trust and concealment of breach of trust, respectively, as well as for serious breach of Derez’s legal and fiduciary duties and obligations as a Director of SCOR and revealing trade secrets.

SCOR also plans to prosecute Barclays, who is Covéa’s financial advisor and financing bank, and Rothschild for serious breach of confidence and trade secrets.

“SCOR’s actions towards Covéa, first through media and now through courts, following a friendly proposal to enter into discussions with respect to the creation of a French-based insurance group with a global footprint, can only raise questions with respect to the defense of the corporate interest of SCOR and of its shareholders’ interests,” said Covéa in a statement released today.

“The schemes and procedures which have been engaged by SCOR, are unprecedentedly aggressive and detrimental to the Paris market place, not only to major shareholders who are represented in corporate bodies, but also to financial investors who have been deprived of the possibility of an attractive value proposal, in a friendly context.”

SCOR originally rejected Covéa ‘s takeover bid on the grounds that it was “fundamentally incompatible” with its strategy of independence and would “jeopardize the Group’s strong value-creating strategy.”

The company came under fire from investors following its rejection of Covéa’s offer, which valued the company’s shares generously at €43 per share, with the President of French investment fund CIAM threatening to hold the SCOR’s management legally liable for gross mismanagement.

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