* Scor shares drop 11 pct, erasing almost all gains since August
* Covea ends takeover attempt started in August
* Covea’s 8.2 billion euro offer was rebuffed by Scor in August (Adds Covea statement)
By Inti Landauro and Sudip Kar-Gupta
PARIS, Jan 29 (Reuters) - French reinsurer Scor is suing rival Covea and its chief executive for breach of trust after Covea announced it had abandoned plans for a friendly takeover of Scor.
Scor’s shares tumbled 11 percent to 36.48 euros on Tuesday, erasing almost all their gains since Covea offered to pay 43 euros a share, and cutting more than $1 billion off Scor’s market value.
“Covea states that a transaction with Scor is no longer part of its strategic options,” Covea said in a statement.
Covea’s takeover proposal in August valued Scor at 8.2 billion euros ($9.4 billion) and it had said since then that it remained interested in a friendly tie-up, even after Scor’s Chief Executive Denis Kessler rejected the offer.
Scor said it was suing Covea and its chief executive, Thierry Derez, in a Paris criminal court for breach of trust.
Derez had sat on Scor’s board since 2016, but suspended that position when Covea made its bid approach and quit the board altogether a few weeks later.
In its statement, Scor alleged Derez breached his legal and fiduciary duties as a company director, broke company secrets and used and disclosed sensitive confidential documents.
Scor also said it would take the case to the local stock and bond regulator as Covea had not warned it would be making a statement.
Covea said in a statement later on Tuesday it denied Scor’s allegations and said they were “unfounded” and “harmful to its reputation”. Covea convened its board for an extraordinary meeting on Wednesday.
A spokeswoman for Derez did not return phone calls seeking comments.
In its original statement, Covea had said it had been subjected to “continued attacks and hostile tactics” which had intensified in recent days.
The Covea spokesman declined to give details of the alleged attacks or to say who was behind them. Scor said it had not made any public comment on Covea since November.
Covea is a cooperative insurer that owns several brands and is the largest property and casualty insurer in France. It is small abroad and had hoped a deal with Scor would bolster its presence in Europe, where there are signs of sector consolidation.
Recent deals have included Marsh & McLennan buying Britain’s JLT for $5.7 billion, while AXA bought XL for about $15 billion.
Covea is bound by a 2016 covenant that states it must seek Scor’s board approval if it wishes to raise its stake in Scor to above 10 percent from the roughly 8 percent it now holds.
The covenant expires in April and investors had speculated it might launch a hostile bid after then if a friendly approach failed.
Scor said it was also launching legal action in London against investment banks Rothschild and Barclays, accusing them of “serious breaches of confidence and trade secrets.”
Barclays has been advising Covea. Rothschild and Barclays had no immediate comment.
$1 = 0.8753 euros Reporting by Inti Landauro; Editing by Richard Lough/Mark Potter/Jane Merriman