Delta Lloyd Didn’t Offer Fubon `Goodies’ for Rights-Offer Vote

  • Dutch insurer responds to complaints from Highfields Capital
  • Fubon had won Delta Lloyd support for boosting its investment

Delta Lloyd NV said it didn’t offer any fees or “goodies” to Fubon Financial Holding Co., one of its largest shareholders, in exchange for support for a 650 million-euro ($738 million) rights offer.

“Delta Lloyd has not granted any incentives to Fubon in exchange for its vote in favor of the rights offering,” the Amsterdam-based insurer said on Monday. It was responding to questions posed on Friday by Highfields Capital Management, the company’s largest shareholder.

Highfields had said that Delta Lloyd would have failed to obtain the required two-thirds shareholder approval for the rights offer without Fubon support. Fubon, based in Taiwan, had previously backed Highfields in a court bid to block the vote. The Dutch insurer agreed on March 16, the day of the vote, to approve Fubon’s efforts to increase its investment and to nominate a supervisory board member designated by the investor if its stake rises to 15 percent.

Delta Lloyd sought the rights offer to raise funds after the European Union introduced stricter capital requirements for insurers in January under rules known as Solvency II. Delta Lloyd is seeking to raise boost its buffer ratio from 131 percent to between 140 percent and 180 percent.

Highfields opposes the plan to bolster capital, saying the information provided by management was incomplete and that the insurer’s target ratio was too high. Delta Lloyd said the rights offering won shareholder support with 77.5 percent of the vote.

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