Old Mutual has announced its intention to unbundle a 12.2% stake in Nedbank Group, marking a total distribution to Old Mutual shareholders worth approximately R10-billion – at a Nedbank price of R167 per share.
This is further to the group’s unbundling of its majority shareholding in Nedbank in 2018 as part of the completion of its managed separation process.
At the time, Old Mutual was left with a 19.4% stake in Nedbank. With the latest transaction, the group will retain a minority interest of 7.2% of the issued ordinary share capital of Nedbank in the shareholder funds of Old Mutual Life Assurance Company, a wholly-owned subsidiary of Old Mutual.
This unbundling allows investors to participate in the different investment merits of Old Mutual and Nedbank, provides a substantial return of capital to Old Mutual shareholders, and supports the efficient allocation of capital by Old Mutual through the retention of a minority stake in Nedbank, both group’s said.
Iain Williamson, Old Mutual chief executive officer, said: “Following an internal review of our investment in Nedbank, we believe that it is in the best interests of our shareholders to dispose of a majority of our stake in Nedbank through an unbundling that we envisage will simplify our business and allow our investors to focus on our core operations.”
As part of the process, qualifying shareholders will receive approximately 1.31954 Nedbank ordinary shares for every 100 Old Mutual ordinary shares held on the relevant security register of Old Mutual, on the expected record date of 5 November 2021.
This unbundling is subject to the receipt of regulatory approvals, including approval from the Prudential Authority.