Old Mutual gets green light to unbundle Nedbank stake
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OLD MUTUAL has obtained all the regulatory approvals required to implement the unbundling of the 12.2 percent stake in Nedbank Group, the company said yesterday.
The process will see Old Mutual becoming a minority shareholder in Nedbank. It is further to Old Mutual’s unbundling of its majority shareholding in Nedbank in 2018 as part of the completion of its managed separation process. At the time, Old Mutual was left with a 19.4 percent stake in Nedbank.
As part of the unbundling Old Mutual shareholders will receive approximately 1.31954 Nedbank ordinary shares for every 100 Old Mutual ordinary shares held on the expected record date of November 5.
Nedbank said the Old Mutual unbundling would not impact its group strategy, day-to-day management or operations, its staff or clients, and the Nedbank Group remains an independent entity.
It also said any existing commercial relationships with Old Mutual would continue to be underpinned by arms length commercial agreements.
“The Old Mutual Unbundling will result in a number of benefits to Nedbank Group and its stakeholders and shareholders, which include, amongst others, an increased free-float of Nedbank Group shares, with the effect of increased liquidity along with a more favourable position in relevant indices,” said Nedbank.
Nedbank said post the Old Mutual unbundling, Old Mutual would retain 36 781 960 Nedbank Group shares, comprising 7.2 percent of the current issued ordinary share capital of Nedbank Group, which will be held in its shareholder funds.
Nedbank said the group’s performance in the first half of 2021 reflected a strong financial recovery off a low base, and key resilience metrics have strengthened to above pre-crisis levels.
“In the group’s interim results to June 30, 2021, it was noted that the guidance on financial performance for the full year 2021 is to grow HEPS and basic EPS by more than 20 percent, and that a further trading statement will be issued to provide more specific guidance when there is reasonable certainty about the extent of the increases and the relevant headline earnings per share and basic earnings per share ranges,” it said.
In addition, the group said its medium-term targets are supportive of value creation for shareholders, and they remained unchanged, as the group aimed to exceed its 2019 diluted Heps level of 2 565 cents, achieve an return on equity (ROE) of greater than the 2019 ROE level of 15 percent, reduce its cost-to-income ratio to below 54 percent and rank number one on NPS (client satisfaction) among South African banks (currently number 2) by end 2023.
Nedbank closed 0.93 percent lower at R172.41 on the JSE yesterday.
BUSINESS REPORT ONLINE