Bruce Whitfield:
More than 92 percent of Old Mutual shareholders who voted in today’s extraordinary general meeting, support the company’s proposed takeover of the Swedish insurer, Skandia. There were no surprises there, I guess. But Old Mutual has delayed by about three weeks of its office for Skandia shareholders to make up their minds. The chief executive of Old Mutual, Jim Sutcliffe, joins us on the line from London. Evening, Jim.

Jim Sutcliffe:
Hi there.

Bruce Whitfield:
You’ve extended your offer, the offer date for Skandia shareholders. Why have you done that?

Jim Sutcliffe:
Yes, for some Skandia shareholders, the period between going unconditional, which would happen at the end of the tender closing period, and the completion date, which happens when the regulators finish their work, and is likely to be the middle of January, creates a period when they can’t trade.

So Skandia shareholders who were positive for the deal had made this point to us, and asked us to limit that to as short a period as possible. So it doesn’t change the ultimate date, the January date, but gives them another three weeks helps them from a trading perspective.

Bruce Whitfield:
Because we got an email from the chief executive of Skandia, Hans Erik Anderson, today, saying that it demonstrates a lack of support for Old Mutual’s offer. He seems to be seeing this change in the date as you not having enough support to reach the 90 percent you want, and you having to extend it to convince shareholders that they really should come to your side.

Jim Sutcliffe:
It’s nothing to do with that, as I say. It’s just a technical issue. I think the support for the offer hasn’t changed a bit over the last couple of weeks.

Bruce Whitfield:
Is it not a risk in the next three weeks, that Skandia might be able to continue undermining your bid? Because we had Hans Erik Anderson on this programme last week. He was very vocally denouncing Old Mutual’s bid, saying it may be in the best interests of Old Mutual’s shareholders, but certainly not in the best interests of Skandia shareholders.

Jim Sutcliffe:
Look, anything’s possible over three weeks, but I think that the timetable for the completion of the bid has always been January, so it doesn’t change that at all. I think what it does do, is it makes it easier for some Skandia shareholders to accept the offer.

They’ll have their third quarter results tomorrow morning, and we had good results, I hope you’d agree, this morning, and no doubt their results will be good.

Bruce Whitfield:
We’ll talk about your quarterly update in a second, if I can just wrap up the Skandia part of the discussion?

Clearly, you want that 90 percent. Do you think that this three-week extension on the acceptance deadline will enable you to convince those shareholders who might be wavering within Skandia that the Old Mutual proposition is better than the Skandia proposition?

Jim Sutcliffe:
No, Bruce, I don’t think that three weeks makes a lot of difference one way or the other. I think that what will help is the fact that people can see from our third quarter trading results that Old Mutual shares, which Skandia shareholders would get in the deal, should be worth a lot, because of the way we’ve been able to grow the business in the meanwhile. So the three weeks isn’t really about convincing a lot more people. It’s simply this technical issue.

Bruce Whitfield:
Okay, Hans Erik Anderson told us last week he would not work for Old Mutual if the deal went through. He said he follows the standalone principle. He said he wouldn’t speak for other executives, but if Hans Erik Anderson is saying he will walk away if Old Mutual gets the go ahead, is there not potentially a problem for Old Mutual taking over a company where you don’t necessarily have top executive support?

Jim Sutcliffe:
Yes, you know 60 percent of Skandia sales are in the UK, and there are plenty of people around Old Mutual, both here in London and in South Africa who have got the right experience to look after these businesses.

But in fact the UK executives of Skandia have always indicated that they are positive towards the deal. So the biggest unit is pretty secure from that point of view.

Likewise, I think the businesses in continental Europe, which is the next 25 percent of their sales — I don’t think that these issues are close to their hearts.

I think the remaining point is in Sweden, where, if Hans Erik doesn’t want to carry on running the company, that’s fine. There are other people who can do it. He has a very good man at the moment called Jak Einmann, who runs the Swedish unit, and there are a lot of people that go to make an insurance company work. Not just one person.

So I don’t think there is a great deal of risk, but in any event the risk is limited to the 15 percent of sales that is in Sweden.

Bruce Whitfield:
Let’s have a quick look at your trading update today. There were strong life sales out of Old Mutual South Africa. Nedbank was ahead of expectations. Mutual & Federal is keeping its head above water nicely. Are you satisfied with the performance of your subsidiaries here?

Jim Sutcliffe:
I think they all did well, on the life side, and you can take it from the bank side as well. The bank assurance sales were up significantly, up 78 percent. Life sales overall were up 18 percent. That’s caused by the growing numbers of agents that we employ in PSA, and indeed a number of group scheme agents that we employ.

Plus the return to normality of the employee benefits side of the business. Nedbank is on track for the 2007 target, which has been around now for 18 months. There was a good increase in NII. I’d like to see the market share figures a little bit better, but there is good progress. And Mutual & Federal, despite the softening industry, continues to produce good underwriting results.

Bruce Whitfield:
Jim Sutcliffe, the chief executive of Old Mutual, on the line to us from London.