Kessler accuses SCOR investor of defamation in war of words over Covéa snub

Denis Kessler, the chief executive of SCOR, has dismissed accusations that the board’s snub of  Covéa’s €8.2 billion offer to buy the reinsurer amounted to “gross management negligence” in a strongly worded letter in which he also accuses the shareholder that made the allegation of defamation.

In a letter sent to Madame Catherine Berjal, the president of investor CIAM, which has been seen by Intelligent Insurer, Kessler described the accusations as “baseless, false and misleading” and stressed that the interests of SCOR’s shareholders were at the heart of the decision.

CIAM became a shareholder in SCOR in the past month. It has been putting pressure on SCOR to reconsider the offer from Covéa arguing that its offer of €43 a share is well above its existing share price, which stood at €38 following the bid, and that SCOR’s unwillingness to engage with Covéa means it cannot take a balanced view on whether it would be in the company’s best corporate interests.

Kessler’s letter responds to the point that it represents a healthy valuation compared with the current share price by arguing that a share price does not reflect the intrinsic value of a company and that the investor cannot have its own valuation model for SCOR.

Kessler writes: “You write that the SCOR SE press release ‘claims’ that a share price of 43 euros per share reflects neither the intrinsic nor the strategic value of SCOR. We do not claim this. We are certain of it and we have seen it proved. We have examined this point very carefully with the help of the two banks advising us. Clearly, CIAM does not have a valuation model for SCOR. If it did, you would have communicated the intrinsic and strategic value of the SCOR group, as obtained from that model, in your letter.”

Kessler details the exact process SCOR went through to determine a decision on the offer – and exactly who was involved. He stresses that the board of directors have always put SCOR’s shareholders first, detailing the fact that its dividends have increased constantly since 2006, rising from €0.80 to €1.65 in 2017. Over this period, the Group has paid out 2.6 billion euros in dividends, he notes.

Kessler also addresses the allegation made by the shareholder that SCOR’s executive committee would have resigned in the event Covéa’s offer were accepted putting “ unacceptable pressure” on its board of directors to reject the offer. He describes this as based on unauthenticated information and adds: “We consider this accusation to be defamatory. It is prejudicial to the good repute and respectability of SCOR’s management.”

He concludes: “Your threat to “hold [me] and the Board of Directors legally liable for a decision which would constitute gross management negligence” demonstrates a worldview far removed from my own. You make baseless accusations and issue threats. This attitude is directly opposed to the spirit of responsibility that has always motivated my actions.”

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