NU Online News Service, Feb. 11, 2004, 5:52 p.m. EST – A Rockville, Md., proxy advisory firm is opposing efforts by a unit of AXA S.A., Paris, to acquire The MONY Group Inc.[@@]
AXA Financial, New York, agreed in September 2003 to pay $1.5 billion, or $31 per share, for MONY, New York. MONY shareholders can vote on the offer by mail or at a special shareholder meeting scheduled for Feb. 24.
Institutional Shareholder Services Inc. has released a report that recommends that shareholders vote against the AXA offer.
MONY managers say the AXA offer is a good one, given MONY's mediocre performance in recent years and the weak state of the economy. As a midsize company struggling to compete with corporate giants, MONY will have a tough time improving its value to suitors other than AXA any time soon, the managers argue.
But the Institutional Shareholder analysts agree with critics who are waging a proxy fight against the deal that the AXA offer is too low.
When compared with MONY's book value and price-to-book value ratios for other insurance deals, the offer price "is outside the boundary of reasonableness," Institutional Shareholder analysts write in their report.
The Institutional Shareholder analysts also agree with deal opponents that acquisition agreement terms calling for MONY managers to receive $90 million in payments from AXA create the impression that the interests of MONY managers differ from those of MONY shareholders.
