Harare – South Africa's Old Mutual Ltd says its shareholders would get about 50 billion rand ($3.52 billion) from the spin-off of a majority stake in Nedbank and dividends.

The Company said it will unbundle the majority of its shareholding in the issued share capital of Nedbank on Monday, 15 October 2018, in line with the anticipated timeline previously communicated by Old Mutual plc to its shareholders on 20 April 2018.

In an announcement on the Zimbabwe Stock Exchange the Group said Nedbank Unbundling is the final step of the Managed Separation, which was materially completed during the six months ended 30 June 2018.

On 11 March 2016, Old Mutual plc announced that its board of directors believed that the long-term interests of Old Mutual plc shareholders and other stakeholders would be best served by separating the four businesses then owned by the Old Mutual plc group from each other so that they could operate as fully independent businesses.

This strategic initiative was described as the Managed Separation of the Old Mutual plc group.

The Managed Separation was materially completed in June 2018, following the demerger and listing of Quilter plc on the London Stock Exchange and the Johannesburg Stock Exchange and the listing of the Old Mutual Shares on the Johannesburg Stock Exchange, the Malawi Stock Exchange, the Namibian Stock Exchange, the London Stock Exchange and the Zimbabwe Stock Exchange.

The Company said it believes that the Nedbank Unbundling continues to be in the best interests of Old Mutual Shareholders as it allows investors to participate in the substantially different investment cases of Old Mutual and Nedbank.

Old Mutual holds 52 percent of Nedbank and after the spin-off on Oct. 15 will hold around 19.9 percent.

“The Group currently holds approximately 52 percent of the issued share capital of Nedbank in its shareholder funds. After the Nedbank Unbundling, the Group will retain a minority interest of 19.9 percent of the issued share capital of Nedbank in the shareholder funds of Old Mutual Life Assurance Company (South Africa) Limited, a wholly-owned subsidiary of Old Mutual.

“The existing arm's length commercial arrangements between Old Mutual and Nedbank will not be affected by the Nedbank Unbundling. These arrangements are contained in the 'relationship agreement' entered into between Old Mutual and Nedbank, which will govern the terms of their relationship upon completion of the Managed Separation and replaces the historic relationship agreement between Old Mutual plc and Nedbank,” the Company said.”

Shareholders will receive 43.2 billion rand from the spin-off and 7.1 billion rand in interim and special dividends that will be paid on Oct. 16, the company said.

Old Mutual will distribute 158.7 million Nedbank shares to its shareholders, who will receive approximately 3.2 Nedbank shares for every 100 Old Mutual shares they own.

"The Old Mutual board believes that the Nedbank Unbundling continues to be in the best interests of Old Mutual shareholders as it allows investors to participate in the substantially different investment cases of Old Mutual and Nedbank," it said.

Equity Axis News