By Carolyn Cohn
LONDON (Reuters) - Shares in British wealth management firm Quilter (L:QLT) jumped on Monday following its initial public offering in one of the last stages of parent Old Mutual's break-up plan.
Anglo-South African financial services firm Old Mutual set the break-up in motion over two years ago, saying regulatory change made the firm too costly and complex to run.
It has already sold its stake in its U.S. asset management business and on Monday priced the Quilter IPO at 145 pence per share, valuing the company at 2.76 billion pounds ($3.66 billion).
In addition to the IPO of 9.6 percent of the shares, existing Old Mutual shareholders will receive 86.6 percent of Quilter through a demerger. The rest will be held on behalf of management and staff.
Quilter shares were trading at 157 pence at 0835 GMT, up 8.3 percent.
Broker Finncap said the valuation represented 2.5 percent of Quilter's assets under management and administration, compared with 2.4 percent and 3.3 percent for peers Brewin Dolphin (L:BRW) and Rathbone (L:RAT).
Other UK insurers and asset managers Prudential (L:PRU) and Standard Life Aberdeen (L:SLA) have followed Old Mutual in hiving off parts of their business.
"We are making good progress towards our vision of becoming the UK's leading wealth management business," Quilter Chief Executive Paul Feeney said.
Old Mutual's other remaining unit, Old Mutual Limited, which currently includes South African lender Nedbank (J:NEDJ), is due to list in Johannesburg and London on Tuesday.
Quilter also has a secondary listing in Johannesburg.
The listings will see shareholders receive one share in Quilter and three in Old Mutual Limited for every three Old Mutual Plc (LON:OML) shares they held.
Bank of America (NYSE:BAC) Merrill Lynch, Goldman Sachs (NYSE:GS) and JP Morgan were joint global coordinators on the Quilter IPO and joint bookrunner was BNP Paribas (PA:BNPP).