Sign in Subscribe
Insurance industry

MONY Group Inc. Shareholders' Opposition Gains Momentum as Delaware State Court Orders Additional Proxy Information

Strategic Insights

— 2 min read

Shareholders' opposition to MONY Group Inc.'s proposed merger with Axa Financial Inc. has gained significant traction, with a Delaware state court's decision potentially delaying the scheduled shareholder vote on the plan. Judge Stephen P. Lamb of the Court of Chancery in Wilmington, Del., has ordered MONY to provide additional proxy information to shareholders regarding the change-in-control provisions of the merger agreement. This development is a significant blow to the merger, as the dissident shareholders have argued that the $90 million in compensation MONY officers stand to gain through the merger is unjustified.

Key Takeaways:

  • MONY Group Inc.'s proposed merger with Axa Financial Inc. is facing opposition from dissident shareholders, led by top three institutional investors Southeastern Asset Management, Highfields Capital Management, and Third Avenue Management.
  • The dissident shareholders claim that Axa Financial's $31-a-share offer is too low and that the change-in-control provisions of the merger agreement unfairly benefit MONY officers to the tune of $90 million in compensation.
  • Judge Stephen P. Lamb of the Court of Chancery in Wilmington, Del., has ordered MONY to provide additional proxy information to shareholders regarding the change-in-control provisions of the merger agreement.
  • The order delays the scheduled shareholder vote on the plan, which was set for Feb. 24, and could potentially scuttle the merger altogether.
  • MONY would need the approval of at least 50% of all outstanding shares to gain approval for the merger, according to the company's proxy statement.
  • Axa Financial's president and chief executive officer, Christopher Condron, has claimed that equity analysts see MONY's stock falling below $31 if the merger isn't approved, a statement that has been rejected by dissident shareholders.
  • A federal judge in Manhattan has granted a temporary restraining order preventing dissident shareholders from sending proxy voting cards to stockholders, but this order has since been reversed by another federal judge.
  • MONY Life Insurance Co.'s A (Excellent) rating is under review with positive implications by A.M. Best, and several of Axa's insurance subsidiaries have also received financial strength ratings from A.M. Best.

Statistics:

  • MONY would need the approval of at least 50% of all outstanding shares to gain approval for the merger.
  • MONY's stock was trading at $30.72 a share on the afternoon of Feb. 18, down 0.42% from the previous close.
  • American depositary receipts of Axa, each representing one ordinary share, were trading at $23.66, down 0.96%.
  • The dissident shareholders represent about 15% of MONY's outstanding shares.

Sources:

  • A.M. Best Company, Inc. (via COMTEX)
  • Glass, Lewis & Co.
  • Institutional Shareholder Services (ISS)
  • Highfields Capital Management
  • Southeastern Asset Management
  • Third Avenue Management
  • Axa Financial Inc.
  • MONY Group Inc.
  • Court of Chancery in Wilmington, Del.

Read more