THE SOUTH African financial giant in a £3.3 billion hostile bid for rival Skandia is determined to press ahead with the deal by lowering the bar of shareholder acceptance.

Old Mutual has slashed the level of support it requires from Skandia shareholders for the deal to go ahead from 90 to 50 per cent.

Skandia bosses said the move showed a "lack of confidence" from Old Mutual and it urged shareholders not to sell up. All other terms of the offer for Skandia, which employs 1,700 people in its UK headquarters in Southampton, remain unchanged, and the deal is open to acceptances until December 16 when Old Mutual has vowed to walk away if it doesn't get the required support.

About 15 per cent of Skandia's shareholders have already rejected Old Mutual's bid as too low.

Old Mutual chief executive Jim Sutcliffe said he had never thought of abandoning the Skandia bid, in spite of resistance from Skandia's board and some of its shareholders.

A statement from Skandia said: "This move clearly demonstrates a lack of confidence by Old Mutual in the level of support for their offer. Fifty per cent or 90 per cent, this Offer is still inadequate and we believe Old Mutual will not achieve over 50 percent on 16 December 2005. We appreciate Old Mutual's decision to walk away at 16 December 2005 when they do not get sufficient Skandia shareholder support. This will allow us to get on with business and deliver on our plans for Skandia's shareholders.

"The Offer is fundamentally unchanged. There is no reason for any shareholder to change their decision on the offer.

"Under Swedish laws Old Mutual does not have the ability to coerce Skandia shareholders.

"We still recommend shareholders not to tender their shares to Old Mutual."