Aegon's shares drop despite government support
Share value of the Dutch insurer drop 13.73 percent on Tuesday following announcement that it will receive EUR 3 billion from the government.29 October 2008
AMSTERDAM - The share value of Dutch insurer Aegon dropped sharply on Tuesday to EUR 2.92, down 13.73 percent, just before closing time.
The sharp drop followed an initial increase in share value of more than 6 percent at the start of the trading day on the Dutch stock exchange.
The early rise came as traders responded to a statement released by Aegon and the Dutch Finance Ministry shortly before trading began, stating that the company would receive EUR 3 billion in support from the Dutch state.
In exchange, the Dutch state will receive Aegon shares at a value of EUR 4 per share, above the EUR 3.38 Aegon was worth at closing time on Monday.
The Dutch state is to receive 8.5 percent interest on its investment and will also appoint two people to Aegon's board.
Until 10 October 2009, Aegon can repurchase one third of the shares sold to the state for between EUR 4 and EUR 4.52 per share.
The remaining shares can be repurchased from the state at any moment for 150 percent of the share value.
Aegon is the second financial company to receive support from the 20-billion-euro fund made available for banks and insurers by the Dutch government following the credit crisis.
Previously, Dutch bank and insurance giant ING received EUR 10 billion from the same fund.
Aegon also released its third-quarter results on Tuesday. The company suffered a net loss of EUR 350 million, due to write-offs of some EUR 400 million.
[dpa / Expatica]