BOSTON, March 16, 2016 /PRNewswire/ -- Highfields Capital Management ("Highfields"), a value-oriented investment management firm that currently holds more than 9% of the outstanding shares of Delta Lloyd N.V. ("Delta Lloyd")(AMS: DL), said today that it is outraged that Delta Lloyd and Fubon have cut a preferential side deal together that benefits Fubon and entrenches Delta Lloyd management at the significant expense of all other shareholders whose interests will be diluted by Delta Lloyd's €650 million Rights Offering.
Faced with the prospect of shareholders rightfully rejecting the Rights Offering, the company, with the clear endorsement of its advisors, has essentially bought Fubon's vote against the will of its shareholders. The Delta Lloyd and Fubon so-called "partnership" is nothing but a pretext to compensate Fubon for its vote to enable Delta Lloyd to save its unnecessary and highly dilutive Rights Offering. This purchase of Fubon's vote comes just 48 hours after Fubon, in front of a Dutch Court, vehemently argued that the Rights Offering was damaging to shareholders, constituted mis-management and should be rejected in the interest of shareholders.
Unfortunately, Fubon has decided to abandon shareholders in exchange for a special deal that leaves other shareholders damaged in a way that Fubon will not be. By giving Fubon a discount on the Rights Offering and a board seat, and perhaps other benefits yet to be determined or disclosed, Fubon is receiving advantages not afforded to other shareholders. Management is engaging in a distortion of shareholder governance in exchange for Fubon voting for a Rights Offering it has publicly stated in Court is ill advised and punitive to shareholders. As a result, Highfields believes Delta Lloyd, at a minimum, has an obligation to offer the same sub-underwriting treatment it is providing to Fubon to all other shareholders.
As Highfields and Fubon have publicly stated, Delta Lloyd is already adequately capitalized and has at its disposal several far less punitive actions that would increase its capital ratio even further. This capital raise will merely give management an excessive capital cushion to pay future dividends--an illogical and circular rationale for a Rights Offering. The fact that Delta Lloyd was compelled to enter into this agreement in order to get the Rights Offering passed is evidence that shareholders have no confidence in this management team and no support for this Rights Offering.
About Highfields Capital
Highfields Capital Management is a $12 billion value-oriented investment management firm which manages private investment funds for endowments, charitable and philanthropic foundations, pension funds and other institutional and private investors. The Highfields funds invest worldwide in public and private companies across a wide variety of industries and security types. The firm was founded in 1998 and is based in Boston, MA.
SOURCE Highfields Capital Management