Picture: REUTERS
Picture: REUTERS

Financial services group Old Mutual will unbundle its majority interest in Nedbank in mid-October in a final step of what it calls a managed separation process.

Old Mutual said in a statement on Wednesday that the majority of its 52% interest in Nedbank will be distributed to its shareholders, leaving it with a 19.9% interest in the banking group.

Old Mutual said the unbundling is in the best interest of the shareholders as it will allow investors to participate in the substantially different investment cases of Old Mutual and Nedbank; provide a substantial return of capital to Old Mutual shareholders; as well as support the efficient allocation of capital and underpin mutually beneficial arm’s length commercial arrangements through the retention of a minority stake of 19.9% in Nedbank in the group’s shareholder funds.

For every 100 Old Mutual shares held, shareholders will receive 3.21176 Nedbank shares. 

Based on Nedbank’s share price on the last date of the unbundling, total distribution to Old Mutual shareholders will be R43.2bn, according to the statement.

Old Mutual, which houses the core emerging-market businesses, listed on the JSE in June, as part of the managed separation process. The emerging-market segment has insurance and asset-management businesses, predominantly in Africa, under its wing. 

Old Mutual’s wealth business, Quilter, listed in London, with its secondary inward listing on the JSE, in June. Quilter provides investment advice and investment platforms to about 900,000 customers.