Old Mutual, the South African insurer, has confirmed that it has held talks with Skandia over a possible $5.7 billion takeover bid for the Swedish savings firm.

The announcement was made after four months of talks between the two financial companies. According to reports, however, Skandia is said to be waiting for a formal offer from Old Mutual.

Old Mutual said that the $5.7 billion offer was comprised of 40% cash and 60% shares. The company said that it expected Skandia shareholders to welcome the deal.

Old Mutual is keen to secure a recommendation from the board of Skandia and is considering selected modifications to the proposal, the group said in a company statement.

Skandia, which has a market value of $5.6 billion, said talks were still ongoing but that it was waiting for a formal bid. If and when a formal offer is presented, the board will evaluate this offer, it said in a statement.