Old Mutual shares surge on break-up and bid talk

OLD MUTUAL said 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 that the £9 billion (R195bn) 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 and Warburg Pincus have tabled a multibillionpound joint cash offer for Old Mutual Wealth, the firm’s British asset manage- ment business, Sky News said, without citing sources.

Cinven, Old Mutual and Warburg declined to comment.

The insurance and asset management sectors have seen several deals in recent years.

Old Mutual Wealth, which analysts value at £3bn to £4bn, bought money manager Quilter Cheviot in 2014, and sold fixedincome asset manager Rogge last month.

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

It said yesterday that it had not made any decisions, but would give an update with annual results on Friday.

Analysts and industry insiders said the firm may also consider listing Old Mutual Wealth, after it listed its US 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, its UK-focused wealth unit, its South Africa-based emerging markets operation, and its institutional asset management business.

Yesterday, Nedbank said 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 Joburg-based analyst, who declined to be named, said that Old Mutual’s local operations held little appeal for US and European investors as it would expose them to swings in the value of the rand.