Cyber Monday Deal: Up to 60% off InvestingProCLAIM SALE

Old Mutual shares surge on break-up and bid talk

Published 07/03/2016, 16:03
© Reuters. Workers clean windows outside the Cape Town headquarters of Anglo-South African financial services company Old Mutual
OMU
-
NEDJ
-
SBKJ
-
CINV
-
FTEU3
-

By Noor Zainab Hussain and Carolyn Cohn

(Reuters) - Anglo-South African financial services company Old Mutual (L:OML) said on Monday it was considering all options in a strategic review, with speculation of a break-up and takeover bids for its assets sending its shares soaring.

Sky News reported on Saturday the 9 billion pound company was working on a plan to split itself up and that this could trigger a takeover battle for its operations which include banking, insurance and asset management.

Private equity firms Cinven (CINV.UL) and Warburg Pincus [WP.UL] have tabled a multi-billion pound joint cash offer for Old Mutual Wealth, the firm's British asset management business, Sky News said, without citing sources. Cinven, Old Mutual and Warburg declined to comment.

At 1130 GMT, Old Mutual shares were up 7.3 percent at 192.8 pence, the biggest rise by a European blue-chip stock (FTEU3).

The insurance and asset management sectors have seen several deals in recent years. Old Mutual Wealth, which analysts value at 3-4 billion pounds, bought money manager Quilter Cheviot in 2014, and sold fixed income asset manager Rogge last month.

Old Mutual announced a strategic review in November, after former Standard Bank (J:SBKJ) executive Bruce Hemphill took over as chief executive.

It said on Monday it had not made any decisions, but would give an update with annual results on March 11.

Analysts and industry insiders said the firm may also consider listing Old Mutual Wealth, after it listed its U.S. asset management business in 2014.

Sky News said the group was looking to divide itself into four standalone companies comprising its stake in South African lender Nedbank Group Ltd (J:NEDJ), its UK-focused wealth unit, its South Africa-based emerging markets operation, and its institutional asset management business.

Nedbank said on Monday it was "engaging collaboratively" with Old Mutual as part of the review, but advised shareholders to "exercise caution" when dealing in Nedbank shares ahead of the update. Old Mutual has a 54.57 percent stake in Nedbank, according to Thomson Reuters data.

One Johannesburg-based analyst, who declined to be named, told Reuters that Old Mutual's South African operations held little appeal for U.S. and European investors as it would expose them to swings in the value of the rand .

© Reuters. Workers clean windows outside the Cape Town headquarters of Anglo-South African financial services company Old Mutual

The firm beat third-quarter sales forecasts, boosted by record inflows into its wealth management unit. It also reported strong sales across its Africa and emerging markets operations, with the latter up 22 percent in local currency terms.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.