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New York-based insurer Mony Group Inc. has claimed a legal victory in its hotly disputed attempt to be bought out by Axa Financial Inc. The company said on Thursday that the 2nd U.S. Circuit Court of Appeals in Manhattan blocked a dissident group of shareholders from mailing duplicate proxy cards to other shareholders. A group of institutional shareholders, led by Highfields Capital Management LP, Longleaf Partners Small-Cap Fund and Southeastern Asset Management Inc., has been fighting the purchase since it was announced in October. They claim the $2.3 billion cash and debt offer undervalues the company and unduly rewards senior Mony managers. The lower court on Thursday said the dissidents could inflict “irreparable harm” by mailing the duplicate proxys to shareholders. Observers have been watching the legal battles between the shareholders and management closely because they believe the winner in the courtroom will probably determine whether Axa Financial, the U.S. unit of French insurance giant Axa SA, will be able to complete its deal. Mony had argued that the dissident shareholders should have to file papers with the Securities and Exchange Commission before mailing forms to other shareholders, and that they should be subject to the same disclosure rules as the company. In a statement claiming victory in the court case, Mony said shareholders should have all the information they need about the dissidents. For example, the insurer said that it came out during the court case that Highfields has a $25 million to $30 million short position covering Axa’s ORAN bonds. Mony said the revelation contradicts Highfields’ statement that its interests are not tied to those of other shareholders. If the deal collapsed, Highfields would benefit from its short bond position while other Mony shareholders would suffer. The ruling Thursday is one of the first bright spots for Mony management in what has been a tortuous battle in gaining approval for its $31 a share bid, which investors say represents a 26 percent discount to Gaap book value. A Delaware court in February ordered Mony to provide shareholders with more information about executive payouts. The company responded by delaying the shareholder vote on the deal until May 18 and reducing the golden parachutes to a total of about $87 million. Mony shares, which have tended to hover above the $31 mark since the deal was announced, closed down 4 cents at $31.40 on Thursday. It’s difficult to determine whether traders now believe the deal will succeed or fail because $31.40 is just about equal to the $31 purchase price and two dividends that will be paid out if the Axa bid closes. Copyright �2004 TDD, LLC. All rights reserved.

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