Old Mutual raises R1.26bn in book build by placing 5.49m shares in Nedbank
OLD MUTUAL Limited (OMU) raised R1.26 billion in an accelerated book build by placing 5.49 million ordinary shares in Nedbank Group as part of its unbundling process.
The ordinary shares were sold to qualifying institutional investors yesterday at R230 a share.
The unbundling has reduced Old Mutual’s stake in Nedbank to a strategic 19.9 percent stake.
Nesan Nair, a senior portfolio manager at Sasfin Securities, yesterday said that the unbundling was the last stage of their “managed separation” from Nedbank.
The first was to unbundle about 30 percent to OMU shareholders.
“This took them down to just less than 20 percent Nedbank shares. This balance of 20 percent has been sold today,” Nair said.
He added that the shares were sold at a good price for investors.
The reducing of the stake in Nedbank has been in the making for more than two years, since March 2016, when Old Mutual plc chief executive Bruce Hemphill announced the managed separation.
The separation gained momentum in June when Old Mutual plc was separated into four standalone companies.
OMU, which focuses on emerging markets, was listed on the JSE, the London Stock Exchange, the Namibian Stock Exchange, the Zimbabwe Stock Exchange and the Malawi Stock Exchange.
The former Old Mutual Wealth, one of the other businesses, was listed as Quilter on the London Stock Exchange, also in June, with Old Mutual Asset Management, now called BrightSphere Investment Group, being a separate business.
OMU informed the market that the unbundling would be completed when OMU’s shareholding in Nedbank was reduced to a 19.9 percent strategic minority shareholding in Nedbank Group.
Ron Klipin, a senior analyst at Cratos Capital, said the 5.5 million Nedbank shares sold in a book build appear to be US shareholders who were unable to take up the Nedbank unbundled shares in terms of legislation in the US.
“The price was attractive for investors who benefited from a weak market,” the analyst said.
OMU’s share price closed 0.04 percent higher on the JSE at R22.85 yesterday, while Nedbank’s share price closed 0.32 percent lower at R235.24.