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JSE-listed Old Mutual said on Wednesday its shareholders would soon receive Nedbank shares and dividends worth as much as R50bn — or a third of its market capitalisation.
Old Mutual is unbundling most of its Nedbank shares to investors as part of a broader "managed separation" process.
The break-up of the group is partly premised on the belief that each unit will be much more highly valued if it is a separate entity.
On October 15, Old Mutual will pass on R43.2bn worth of Nedbank shares to its shareholders, based on recent closing prices. Through the unbundling, it will reduce its stake in the bank from 52% to 19.9%.
About 3.2 Nedbank shares will be distributed for every 100 Old Mutual shares owned by eligible shareholders.
The next day, October 16, Old Mutual will pay R7.1bn in interim and special dividends.
The distributions, worth a combined R50.3bn, equate roughly to Tiger Brands’s market capitalisation.
Invigorated
"I am delighted that as a newly listed and invigorated company, we continue to make good progress with our strategic plans and we continue to deliver very good value for our shareholders," Old Mutual CEO Peter Moyo said in a call on Wednesday.
Moyo said that following its unbundling, Nedbank planned to buy out small shareholders. This move is set for "just before the Christmas period".
Nedbank said in a statement it expected to have as many as 500,000 shareholders after October 15, up from its current 20,000 shareholders. Most of these investors would be "odd-lot" holders with fewer than 100 shares in the bank and a combined ownership of 1.3%, Nedbank said.
As such, Nedbank planned to make an offer to small shareholders to repurchase their shares. Those investors would, however, be able to reject the offer and hang onto their stock.
"The proposed odd-lot offer will reduce the complexity and cost to the Nedbank Group of managing a significantly larger shareholder base," the bank said in its statement.
Old Mutual’s shares closed 1.3% up at R30.60 on Tuesday. The shares traded at R29.39 when the group listed in late June. Nedbank lost 0.2% to close at R262.72 on Tuesday.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
UNBUNDLING
Old Mutual shareholders to get a R50bn windfall
JSE-listed Old Mutual said on Wednesday its shareholders would soon receive Nedbank shares and dividends worth as much as R50bn — or a third of its market capitalisation.
Old Mutual is unbundling most of its Nedbank shares to investors as part of a broader "managed separation" process.
The break-up of the group is partly premised on the belief that each unit will be much more highly valued if it is a separate entity.
On October 15, Old Mutual will pass on R43.2bn worth of Nedbank shares to its shareholders, based on recent closing prices. Through the unbundling, it will reduce its stake in the bank from 52% to 19.9%.
About 3.2 Nedbank shares will be distributed for every 100 Old Mutual shares owned by eligible shareholders.
The next day, October 16, Old Mutual will pay R7.1bn in interim and special dividends.
The distributions, worth a combined R50.3bn, equate roughly to Tiger Brands’s market capitalisation.
Invigorated
"I am delighted that as a newly listed and invigorated company, we continue to make good progress with our strategic plans and we continue to deliver very good value for our shareholders," Old Mutual CEO Peter Moyo said in a call on Wednesday.
Moyo said that following its unbundling, Nedbank planned to buy out small shareholders. This move is set for "just before the Christmas period".
Nedbank said in a statement it expected to have as many as 500,000 shareholders after October 15, up from its current 20,000 shareholders. Most of these investors would be "odd-lot" holders with fewer than 100 shares in the bank and a combined ownership of 1.3%, Nedbank said.
As such, Nedbank planned to make an offer to small shareholders to repurchase their shares. Those investors would, however, be able to reject the offer and hang onto their stock.
"The proposed odd-lot offer will reduce the complexity and cost to the Nedbank Group of managing a significantly larger shareholder base," the bank said in its statement.
Old Mutual’s shares closed 1.3% up at R30.60 on Tuesday. The shares traded at R29.39 when the group listed in late June. Nedbank lost 0.2% to close at R262.72 on Tuesday.
hedleyn@businesslive.co.za
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