A federal judge and a proxy advisory service have sided with money managers who are fighting efforts by a unit of AXA S.A. 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.
Highfields Capital Management L.P., Boston, a hedge fund, has been trying to mail MONY shareholders a copy of the deal proxy, to help shareholders vote against the deal.
MONY tried to block the proxy mailing, but U.S. District Judge Richard Holwell, a judge in the U.S. District Court in New York, ruled that Highfields can send MONY shareholders the proxy cards.
In related news, Institutional Shareholder Services Inc., Rockville, Md., a firm that helps more than 700 money managers decide how to vote their proxies, has recommended that its clients vote against the AXA offer.
Institutional Shareholder analysts agree with Highfields executives and their allies that the price AXA has offered for MONY is too low.
When compared with MONYs 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 a comment on the proposed deal.
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.