Denis Kessler, Chief Executive Officer (CEO) of French reinsurer SCOR, has defended the company’s decision to initiate criminal actions against Covéa and its CEO, Thierry Derez, following the rejection of an €8.2 billion takeover bid last year.
The SCOR boss addressed criticism from investors such as Catherine Berjal, CEO of investment management firm CIAM, who last week accused Kessler of pursuing an “incredibly aggressive legal strategy” in order to protect his position in the company and his personal interests.
In a reply to Berjal, Kessler maintained that it was his “fiduciary duty” to report any offences committed against the company and held that the legal actions initiated by SCOR were “precisely intended to protect SCOR’s corporate interest.”
“Having suffered serious harm, SCOR intends to have sanctioned and remedied not only the criminal misconduct (moral harm) but also the civil misconduct (economic harm) committed in the context of the preparation and submission by Covéa of its unsolicited proposed takeover of SCOR,” Kessler stated. “SCOR is not being resistant nor hostile, the Group is simply asserting its legitimate rights.”
SCOR intends prosecute Derez and Covéa for breach of trust and concealment of breach of trust, respectively, as well as for breach of Derez’s legal and fiduciary duties and obligations as a Director of SCOR and revealing trade secrets.
Derez was forced to step down from SCOR’s Board of Directors in November after tensions escalated over what SCOR deemed a “hostile and unfriendly” takeover attempt.
Covéa has since rejected SCOR’s accusations as “groundless” and reaffirmed its unanimous support for Thierry Derez.
In his most recent letter, Kessler also responded to Berjal’s request to detail his proposals to boost the share price of SCOR – which currently stands at €38 – above the €43 per share price originally offered by Covéa.
“I can assure you that SCOR’s teams are fully committed to further the Group’s development for the benefit of all of its long-term shareholders and all of its stakeholders,” said Kessler. “The market will be informed, in due course, of the strategic plan prepared by SCOR for the coming years.”
“This will also be an opportunity for the Group to state its new objectives and to specify the manner and the means chosen to achieve them,” he continued. “I am convinced that you will benefit from the same value creation that we have been providing to our long-term investors for many years.”
SCOR came under fire from investors for refusing Covéa’s acquisition offer in September 2018, which it rejected on the grounds that it was “fundamentally incompatible” with its strategy of independence and would “jeopardize the Group’s strong value-creating strategy.”
Berjal previously threatened to hold the company’s leaders legally liable for gross mismanagement and later accused the reinsurer of using its remuneration as an “anti-takeover” policy.
Kessler has dismissed these claims as “baseless, false and misleading” and suggested that CIAM’s indignation has been “clearly driven by (very) short-term speculative interests.”
CIAM took a 0.77% stake in SCOR while the acquisition rumours circulated in September and has since increased its share to 0.94%.
