Scor CEO says CIAM activist fund’s letter constitutes slander

(Reuters) — French reinsurer Scor SE’s chief executive, Denis Kessler, said on Tuesday that criticism made by activist fund CIAM over his handling of a merger proposal constituted slander.

In an open letter released on Monday, CIAM President Catherine Berjal had questioned whether Mr. Kessler intended to protect his personal interests to the detriment of the company’s shareholders.

The letter said the blunt rejection by Mr. Kessler of a merger proposal made by France’s Covea Mutual Insurance Group Co. and the subsequent lawsuit lodged by Scor against Covea and its CEO led to a loss of over €900 million ($1.03 billion) in Scor’s market value.

CIAM’s comments “are unfounded and will constitute slander if (CIAM) continue(s) disseminating them,” Mr. Kessler told Ms. Berjal in a letter on Tuesday.

He added Scor will release a new strategic plan for the coming years “in due course.”

Covea, Scor’s largest shareholder with an 8% stake, offered in September to pay €43 per Scor share, a 21% premium over the market price at the time.

The potential deal was viewed positively by investors, with the insurance industry undergoing a wave of consolidation as major players grapple with technology changes and the rise of new rivals from Asia.

Scor shares rose by more than 20% in the first two months after Covea made its offer before erasing almost all those gains when Covea dropped the merger plan last week.

Scor shares, which hit a peak of €43.59 in early November, were flat at €37.95 on Tuesday.

Mr. Kessler had rejected Covea’s bid, saying the price was too low. Scor’s board of directors also rejected the offer and eventually sued Covea and Covea Chief Executive Thierry Derez, who also held a boardroom seat at Scor.

Scor alleged Mr. Derez breached his legal and fiduciary duties as a company director, disclosed company secrets and used and disclosed confidential documents. Covea deny any wrongdoing.

After fending off the takeover bid and the dismal share performance, Mr. Kessler is now struggling to convince investors that he can oversee a rise in the value of Scor, which holds its annual shareholders meeting in April.