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Delta Lloyd's largest shareholder continues to oppose the Dutch insurance company's planned rights issue, which it said on Monday was "massively dilutive" and would "unnecessarily overcapitalise the company at the expense of shareholders".
Highfields Capital Management, a US investment fund that holds 9% of Delta Lloyd, launched its latest salvo against the firm on Monday, after the Dutch Enterprise Chamber, a court, decided not to block a shareholder vote on the EUR 650m offering.
Highfields, together with Fubon, a Taiwanese investor and Delta Lloyd's third largest shareholder, laid out the case for delaying the deal in a hearing before the Chamber on Monday. The investors argued that the insurer was adequately capitalised, and had at its disposal several actions that would increase its capital ratio even further.
Highfields also said Delta Lloyd had failed to provide complete information to shareholders, and voiced "significant concerns about the management team's failed stewardship of Delta Lloyd and its lack of alignment with shareholders' interests". In particular, Highfields noted that the insurer's stock had plummeted 70% since Hans van der Noordaa took over as CEO at the start of last year, making it "the worst performing insurance stock in Europe and the worst performing stock in the AEX".
The investment fund said Delta Lloyd's poor trading performance had little impact on the CEO, as he owned no shares in the insurer, but had been massively value destructive to shareholders, and suggested the rights issue plan was...