Ruling Forces MONY To Postpone AXA Deal Vote

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A court ruling has forced the MONY Group Inc. to postpone a meeting where stockholders could vote on the AXA Financial Inc. acquisition offer.

MONY has delayed the meeting, originally scheduled for Feb. 24, so it can send a revised deal proxy statement to its stockholders.

Vice Chancellor Stephen Lamb, a judge in the Delaware Court of Chancery, asked the New York insurer to send stockholders more information about the “change in control” compensation that AXA Financial has agreed to pay MONY managers.

AXA Financial, a New York-based unit of AXA S.A., Paris, agreed in September 2003, to pay $1.5 billion, or $31 per share, for MONY, and to pay MONY managers about $90 million in change-in-control compensation. MONY shareholders can vote on the offer by mail or at the special shareholder meeting.

Lamb agreed with the deal critics that MONY should tell shareholders that AXA Financial has offered MONY managers a rich change-in-control compensation package.

“As a percentage of deal value, the money that will be paid to beneficiaries of the CICs is above the amount paid in CICs in more than 75% of comparable transactions,” Lamb writes in the ruling.

Lamb rejected the critics other challenges to the proxy statement, and he supported MONYs defense of the deal price.

Critics say the price is too low, but MONY Chairman Michael Roth says the failure of a higher bid to surface since September 2003 is proof that the price is right.

Lamb agrees in his ruling that a 5-month “market check” should be “more than adequate to determine if the price offered by AXA was the best price reasonably available.”

AXA Financial President Christopher Condron emphasizes that his company plans to stick with its initial offer.

“We believe our offer to shareholders of $31 per share is full and fair,” Condron says. “We will not increase it.”


Reproduced from National Underwriter Life & Health/Financial Services Edition, February 20, 2004. Copyright 2004 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.