MarketWatch – Late into dinner with investment bankers at the upscale Stockholm restaurant Divino in mid-November 2004, Swedish hedge fund investor Christer Gardell got the call he was waiting for: Carl Icahn was agreeing to invest in Sweden’s oldest listed company, with plans to fix or sell the scandal-studded giant.
“He asked me one last time if I was really sure about this one,” Gardell recalls. “I said, ‘Yes,’ and that was it. We were on.”
Over the next few days, Icahn and Gardell each invested EUR60 million in Swedish insurer Skandia Foersaekrings AB (SDIA-SEK.SK), betting that new management could take its beaten-down stock in only one direction.
Only six months later, word was out that Skandia was on the block and, within 10 months, South Africa’s Old Mutual PLC (OM.LN) had made a bold bid, triggering a protracted takeover struggle that’s only now coming to a close.
Tendering their shares to Old Mutual last month, Icahn and Gardell reaped a combined EUR106 million on top of their investment, according to Gardell.
As Old Mutual’s $6.9-billion (SEK54.89 billion) acquisition of Skandia draws to a close, the role of hedge funds in advancing the deal is just now emerging.
