NU Online News Service, Jan. 23, 2004, 11:06 a.m. EST – A Southern money manager is trying to launch a proxy war against efforts by AXA Financial Inc. to acquire The MONY Group Inc., New York.[@@]
Southeastern Asset Management Inc., Memphis, Tenn., says it will be voting its clients’ MONY shares against the AXA Financial offer. Southeastern also has submitted a shareholder proposal that calls for MONY’s board to evaluate whether a change of management would benefit shareholders.
The Longleaf Partners Small-Cap Fund and other Southeastern clients own about 4.7% of MONY’s outstanding shares, Southeastern says.
AXA Financial, New York, a unit of AXA S.A., Paris, has agreed to pay $31 per share for MONY. MONY has scheduled a Feb. 24 special shareholder meeting. Shareholders can vote on the AXA Financial offer by mail or at the shareholder meeting.
Southeastern and some other money managers point out that MONY has a reported book value of $41.68 per share. The $31-per-share offer “gives no credit to the company’s distribution network or brand name,” according to Staley Cates, Southeastern’s president.
Southeastern also notes that AXA Financial has agreed to pay senior MONY managers severance payouts with a value of about 6% of the $1.5 billion that shareholders would receive. Cates describes the severance arrangement as a possible conflict of interest.
In most comparable deals, the buyer agrees to pay senior managers total severance equal to about 1% to 1.5% of what the shareholders will receive, Cates says.