Old Mutual says Skandia dispute settled

LONDON (Reuters) - Anglo-South African Old Mutual OM.L said its Swedish subsidiary, Skandia AB, had reached a favourable settlement in a six-year-old dispute over the sale of its asset management business, prompting a jump in its shares.

Under a deal brokered by Swedish arbitrators, Skandia's mutually run life insurance unit, Skandia Liv, has lost a claim for part of the proceeds of the 260 million pound ($460 million) disposal in 2002, Old Mutual said in a statement on Friday.

By 10:10 a.m., Old Mutual shares were up 5.5 percent at 76.6 pence, making it the biggest riser in the FTSE 100 share index, which was down 0.6 percent.

"The key point is that the arbitration committee ruled that Skandia doesn't have to compensate Skandia Liv for the actual sale price," Keefe, Bruyette and Woods analyst Greig Paterson said.

Skandia Liv had claimed it was entitled to part of the proceeds of the sale of Skandia Asset Management, which managed Skandia Liv's assets. The business was sold to Norway's Den Norske Bank.

However, the arbitrators ordered Skandia to pay Skandia Liv 47 million pounds in compensation for excessively high asset management fees charged by the investment management division under an agreement negotiated by the parent company the same year.

Old Mutual said the payment will be largely covered by 41 million pounds it set aside for that purpose on acquiring Skandia in 2006.

"We are pleased with the outcome of the ruling. We can now put this behind us and continue to focus on achieving our strategic aims for the Swedish business," Old Mutual Chief Executive Julian Roberts said in a statement.

(Reporting by Myles Neligan; Editing by Quentin Bryar)