SWEDEN – The SEK138bn (€14.7bn) Fjärde AP-fonden, the Fourth Swedish National Pension Fund or AP4, has followed its sister fund AP2 in rejecting Old Mutual’s bid for insurance firm Skandia.

“The fund rejects Old Mutual’s offer for Skandia,” AP4 said in a statement today, add its holding in the insurer is long-term.

State-owned AP4 said it disliked the fact that it was a hostile bid and that it comes “too early” for the Skandia management which have been dealing with a series of crises and not focusing on core business. Last week AP2 said Skandia needed “peace and quiet”.

AP4 said Skandia has made a credible case for remaining independent and that the offer lacks a normal takeover premium.

The fund also referred to “abnormally high” currency and political risk involved as most of the purchase price for Skandia will via new Old Mutual shares, which gets most of its revenue and profits from South Africa.

Skandia's board rejected the offer on Friday.

"We are not going to comment on specific shareholder reaction,” an Old Mutual spokesman was quoted as saying by Reuters. “Overall, we believe ultimately shareholders are seeing the merits of this proposal.”

AP4 is currently tendering for new solutions for its performance and risk analysis. Yesterday it awarded sole custody of its assets to Northern Trust, resulting in a loss for incumbent State Street.