Nedbank responds to Old Mutual split talk
South Africa’s fourth largest bank, Nedbank has cautioned over dealings in its shares following speculation that Old Mutual is planning to split itself up into standalone companies.
On Saturday, Sky News reported that Old Mutual is working on a £9 billion plan to break-up the company into standalone entities, comprising its stake in Nedbank‚ its UK-focused wealth unit‚ its emerging markets operation based in SA‚ and its institutional asset management business.
Old Mutual has a 40% holding in Nedbank, which boasts 7.4 million retail clients in South Africa.
In a statement on Monday, Nedbank said: ‘Old Mutual and Nedbank have been engaging collaboratively as part of the ongoing strategic review being conducted by Old Mutual
under its new chief executive.”
The bank also referred to the following announcement released by Old Mutual on Monday 7 March 2016.
“Old Mutual plc (‘Old Mutual’) notes the press speculation on Saturday 5 March 2016. When our new Chief Executive Bruce Hemphill joined on 1 November 2015, we announced that we would be conducting a strategic review.
We can confirm that all options for the strategic review are being considered but no decision has yet been made.
Old Mutual is due to announce its preliminary results for 2015 on 11 March 2016 and will provide an update on the strategic review at that time.”
Nedbank advised its shareholders to exercise caution when dealing in Nedbank Group securities until an update on Old Mutual’s strategic review is provided on 11 March, 2016.
Shares in Nedbank declined 1% to R188.62 on the JSE in morning trade on Monday.
Industry experts questioned whether Nedbank could become an acquisition target.
Nedbank, which is the smallest of the big four SA banks, may find some interest from others, Economists.co.za chief economist Mike Schussler told Fin24 over the weekend.
“I think the bank is a good bank, but the feeling is that they have not done enough in Africa. But all in all they would be an easier target than Barclays Africa which is much much bigger,” he said.
Last week, Barclays announced that it will be selling down its stake in Barclays Africa Group Limited – trading as Absa in South Africa.
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