As a result of the verdict of the Court of Appeals in Belgium on December 16, the coming vote (at least in Belgium for the time being) regarding the 3, 5, and 6 October 2008 transactions, and a new Fortis Board, the Fortis case is once again fully open in the view of Euroshareholders, the pan-European investors organization. In recent days various scenarios on the future of Fortis have been circulating. One such scenario from Ghent professor Koen Schoors entails practically a complete reunification of the old Fortis group.
Euroshareholders is in principle positive about that scenario, but sees significant complications in its implementation. Euroshareholders proposes, as a compromise, a scenario in which Fortis is revived as an insurance group with Belgian, Dutch and international insurance business activities. Following the ruling of the Court of Appeal, the Belgian insurance business is now again part of Fortis Holding. That situation would continue if Fortis shareholders vote against the transactions of 3, 5, and 6 October, and if the transaction with BNP Paribas is not completed by February 28, 2009.
In exchange for the contribution of the Dutch insurance activities, the state of the Netherlands could acquire shares of Fortis at a rate of at least 5 euros per share, being the share price in the week of September 29 - October 3, 2008. Negotiations would need to be held with BNP Paribas and the Dutch state to improve the conditions under which the banking activities would be sold. The end result would be that Fortis Holding would become a focused international insurer with a strong home base in the Benelux countries.
Advantages of the Euroshareholders scenario:
For BNP Paribas:
- an end to uncertainty about this transactions, which as of late has lead to a accelerating fall in its stock's share price
- strengthening of its banking business (which has been the primary goal of BNP Paribas)
For the Belgian state:
- revival of Fortis as a major financial group en Belgian employer
- solution of a politically sensitive case, in which transactions that came to be under pressure (including from the Belgian government) are corrected.
For the Dutch state:
- The Nederlands remains the owner of Fortis Bank and ABN Amro, which can be integrated and reorganized
- share ownership in a healthy Fortis insurance group
- smaller risk of claims for damages
For Fortis:
- once again becomes a financial group with sufficient size
- focused company with healthy, coherent insurance activities
- chance for shareholders to recover shareholder value
- no unattractive portfolio of toxic assets
Euroshareholders feels encouraged in its vision by the statements of Fortis chairman Jan-Michiel Hessels and the new Fortis director Karel De Boeck. Hessels said in the shareholders meeting on 2 December that the insurance business was not in trouble and that selling it was not necessary. In addition, according to De Boeck, the Dutch insurance activities are worth about 3 billion euros more than the price at which the Dutch state took over these activities.
Regarding the hearing at the Dutch Enterprise Chamber, Euroshareholders reports that this hearing will take place on Tuesday, January 27 at 9.00 at the Amsterdam Court. Euroshareholders is represented in this case by Mr. Adriaan Stoop of Leidsegracht Lawyers in Amsterdam.
Euroshareholders,
Peter Paul de Vries Jean Pierre Paelinck
President General Secretary
President General Secretary
