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Old Mutual plots course that will split 173-year-old business

Insurer to separate its four units by the end of this year, the new Old Mutual Ltd. plans ‘return’ to Africa on the JSE.
Picture: Reuters

Old Mutual Plc’s shareholders received their final road map for businesses that are going their separate ways.

The London-based insurer, founded in South Africa in 1845, is splitting its four financial-services businesses through what it calls a managed separation, and on Friday it gave final details on what shareholders will get. It is hiving off its wealth management unit, emerging-markets business and Johannesburg-based lender Nedbank Group after concluding that the company’s shares trade at a discount to the total value of the individual assets. In November, it completed the disposal of its US-based OM Asset Management division, which has since re-branded itself as BrightSphere Investment Group Plc.

When first announcing the plan to shareholders in March 2016, Chief Executive Officer Bruce Hemphill joked that he was effectively working himself out of the job. The split is the culmination of a strategic review started by Hemphill when he took the post in November 2015, in an effort to boost profitability and reignite a share price that was trailing its peers. That day is closer, with Hemphill saying most of the work will be done by the end of the first half, ahead of schedule.

Here are the steps outlined in statements issued by Old Mutual on Friday:

  • It will first deal with Quilter, the UK wealth-management business. The plan is to have a primary listing in London and a secondary listing in Johannesburg. Old Mutual wants to distribute 86.6% of the unit to shareholders and divest up to 9.6% through a sale to institutional investors.
  • The next day will see Old Mutual Ltd. start trading. That’s the sub-Saharan African insurance, savings and asset management business, whose primary listing in Johannesburg is expected to occur on June 26. OML will become the holding company for Old Mutual Plc. It will have a listing on the London Stock Exchange and secondary listings on the Malawi, Namibia and Zimbabwe bourses.
  • The third step, which will take place six months after the listing of OML, will see 32% of Nedbank unbundled to shareholders, with OML retaining a 19.9% stake.

The company is proposing to offer one share in Quilter and three OML shares for every three Old Mutual shares, according to the statement. While the final value still has to be determined, at current market prices OML shareholders would receive three Nedbank shares for every 100 OML shares they own.

A shareholder meeting will be held on May 25 to vote on the proposals.

“We are on track with our listing as part of the managed separation process,” OML CEO Peter Moyo said. “The listing of OML on the JSE will signal the return of Old Mutual to Africa.”

© 2018 Bloomberg

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If ever there was a company that needed a major shake-up!!

Old Mutual and ilk are famous for pissing away investors hard earned cash on ill-conceived forays into markets they aint got the guns for, that’s the good news.
the bad news is their clubmates are ALL the same . Liberty lost a huge portion of my father’s money.
Here’s some good advice from an old fart to any young person reading this:
If you want to be secure in later years regard taxfree penions/provident payout as a bonus, do’nt rely on it.
make yr own nestegg as best you can.
Warren Buffet famously won a bet with a fund manager by beating his fund over 10 yrs by simply investing in a Vanguard index fund.
Fund managers are todays snakeoil salesmen

End of comments.

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