Old Mutual fixes listings dates

• Unbundling of stake in Nedbank will complete separation process

Old Mutual has set off on the road to complete the managed separation process it embarked on two years ago, announcing dates and details for the two listings that will lead to the break-up of the group. The group’s UK wealth business, Quilter, plans to list on the London Stock Exchange on June 25, while Old Mutual’s Johannesburgbased sub-Saharan African business will come home to a primary listing on the JSE on June 26.

Old Mutual has set off on the road to complete the managed separation process it embarked on two years ago, announcing dates and details on Friday for the two listings that will lead to the break-up of the group.

The group’s UK wealth business Quilter plans to list on the London Stock Exchange (LSE) on June 25 while Old Mutual Ltd, its Johannesburg-based subSaharan African business, will come home to a primary listing on the JSE on June 26, in a move Old Mutual Ltd CEO Peter Moyo said would “signal the return of Old Mutual to Africa”.

That will end the group’s almost two decades as a London-based, FTSE100 financial services group, with its shareholders receiving shares in both Quilter and Old Mutual Ltd before the London listing of Old Mutual plc is terminated on June 29.

The bulk of the group’s stake in Nedbank will be unbundled to Old Mutual Ltd shareholders about six months later, completing the managed separation process that the London-group embarked on in March 2016 in an effort to unlock value for shareholders and free up its underlying businesses.

Old Mutual plc, which will hold its final annual general meeting on April 30, announced late on Friday that shareholders would each receive three Old Mutual Ltd and one Quilter share for every Old Mutual plc share they held. Quilter would bring in new shareholders, with a cash placement of up to 9.6% of its shares to institutional investors at the listing.

Shareholders in Old Mutual Ltd were expected to receive about three Nedbank shares for every 100 shares in Old Mutual Ltd, with 32% of the banking group being unbundled to shareholders, the group indicated on Friday.

Nedbank and Old Mutual Ltd have signed a relationship agreement to govern how they will work together.

“We now have certainty on key elements of the relationship with Old Mutual Ltd that will inform how the two businesses operate commercially with each other … post the Nedbank unbundling,” said Nedbank chief financial officer Raisibe Morathi.

As the announcement went out after the JSE had closed and just 20 minutes before the close of trading on the LSE, analysts expect markets could react on Monday to the documentation on each of the two new listings published on Friday.

The Old Mutual plc share was at 242.60p late on Friday, well up on 2017’s low of 185.50p. But most analysts expect there is much more value to be had from a break-up, with more bullish analysts such as Bernstein’s Edward Houghton estimating the sum of the parts could be worth as much as 315p.

Citadel fund manager Adrian Saville said the size of the “asset trap” in Old Mutual plc was R10 to R15 a share that could be released by the break-up.

“This is one of the catalysts we have been looking for in the investment case for Old Mutual. They have essentially released the sum of the parts that are in the holding structure, which is at a very big discount to intrinsic value, not because of management or business performance but because investors don’t have line of sight or access to the underlying businesses. So the unbundling is a clear step in the direction of releasing that value.”