Old Mutual Wealth has said that it will proceed with a de-merger and stock exchange listing, on both the London and Johannesburg stock exchanges.
The announcement came on Tuesday morning, ahead of parent company Old Mutual Plc’s annual general meeting in London, where the South Africa-focused financial services company is listed.
The likely date of the listing wasn’t given.
In a statement aimed at updating the market on what it has been calling its “managed separation” of its business into four separate entities, announced earlier this year, Old Mutual said that alongside the de-merger of the group’s Wealth operations, it is also planning to create a “new South African holding company”.
“In the meantime, we intend to continue the phased reduction of our 65.8% holding in Old Mutual Asset Management, in an orderly manner, while supporting the development of its strategy, as evidenced by its recently-announced acquisition of a majority stake in Landmark Partners,” the statement said.
“Through Old Mutual plc’s asset disposals and use of its surplus cash, we intend to materially reduce Old Mutual’s holding company debt.”
The newly-created South African holding company, it added, will be used to distribute “a significant proportion” of the Old Mutual group’s shareholding in Nedbank to shareholders on the register of the new South African holding company, which would leave Old Mutual Emerging Markets (OMEM) as the principal business within that group.
In announcing the managed separation, Old Mutual said it was taking the action to maximise shareholder value.
‘Endorsement of strategy’
Commenting on the plan to list the OMW entity as a freestanding company, Old Mutual Wealth chief executive Paul Feeney, pictured, made reference to the group’s recent moves into the advisory space, in the UK as well as internationally, in saying that the plan represented a “clear endorsement of our vertically integrated strategy, and the strength and readiness of our business for the next stage of our corporate journey”.
“By putting customer needs at the heart of our business strategy, we are transforming into an award-winning, next generation wealth management business,” he added.
Referring to last week’s UK referendum on EU membership, Feeney added: “What the landscape will look like when the UK extracts itself from the EU is far from clear. It is our expectation that the outcome of the EU Referendum vote will continue to drive increased levels of market volatility.
“Our focus is on our customers, on managing their assets and helping them navigate through these uncharted waters. We will not lose our focus on this task.”
To read the Old Mutual statement updating market participants on its managed separation plans, click here.