Acquisition of UAM Corp.
Old Mutual PLC
19 June 2000
OLD MUTUAL PLC
Acquisition of United Asset Management Corporation
for US$1.46 billion in cash
Old Mutual plc is an international financial services group, based in
London, with a substantial financial services business in southern
Africa including an integrated portfolio of activities in asset
management (including unit trusts, portfolio management and
stockbroking services), banking and general insurance.
* Acquisition fulfils a core strategic objective of Old Mutual plc.
* Increases multinational asset management capability
* Triples global FUM to US$275 billion
* Attractive financial terms - 7.3 x LTM EBITDA
There will be a presentation to sell-side analysts in London and
Johannesburg at 11.00 am (UK time) or 12.00 noon (SA time) today
Monday 19 June 2000. The venues for the presentation are as follows:
In London - College Hill, 78 Cannon Street, London EC4N 6HH
In Johannesburg - Crown Plaza Hotel, Corner Grayston and Rivonia,
Sandown, Sandton
Arrangements for media interviews, please contact College Hill.
ENQUIRIES:
Old Mutual Tel: + 44 20 7569 0100
James Poole
College Hill London Tel: + 44 20 7457 2020
Gareth David
Mark Garraway
College Hill Johannesburg Tel: + 27 11 447 3030
Tony Friend
OLD MUTUAL PLC HAS REACHED AGREEMENT TO ACQUIRE
UNITED ASSET MANAGEMENT CORPORATION,
ONE OF THE LARGEST INVESTMENT MANAGEMENT
ORGANISATIONS IN THE WORLD, FOR $25 PER SHARE IN CASH
London, England and Boston, Massachusetts--(BUSINESS WIRE)--June 19,
2000--Old Mutual plc (LSE: OML) and United Asset Management
Corporation (NYSE: UAM) today announced an agreement for Old Mutual
to acquire United Asset Management for $25 per share in cash. The
transaction values the equity of United Asset Management at
approximately $1.46 billion. United Asset Management has net debt of
$769 million which will be assumed or refinanced in the transaction.
The agreement has been approved by the boards of directors of both
companies and is expected to be completed by the end of this year.
Old Mutual will effect the transaction through a tender offer, which
will commence within thirty days, for all of the outstanding shares
of United Asset Management common stock. Any shares not purchased in
the tender offer will, following completion of the offer, be
exchanged for cash in the amount of $25 per share in a merger by
which United Asset Management will become a wholly-owned subsidiary
of Old Mutual. The price to be paid in the offer and the merger is
subject to downward adjustment in certain circumstances, including
should United Asset Management's revenues from assets under
management, excluding the effects of market movements, decline below
a specified level prior to the consummation of the offer.
Since its demutualisation and initial public offering in July 1999,
Old Mutual's strategic focus has been on the expansion of its asset
management businesses in Europe and the United States. In March
2000, Old Mutual completed the acquisition of Gerrard Group, a
specialist banking, financial services and private-client
stockbroking and wealth management business in the United Kingdom.
United Asset Management will bring to Old Mutual a wide range of
investment products and complementary investment styles. Overall,
the acquisition of United Asset Management will increase Old Mutual's
assets under management to approximately $275 billion.
Commenting on the transaction, Mike Levett, Chairman and Chief
Executive Officer of Old Mutual, said:
'We believe this transaction has considerable benefits for both Old
Mutual and the United Asset Management group of firms, their clients
and professional staff. We expect there to be significant
opportunities for cross selling and distribution of investment
products into Old Mutual's client base. We believe this transaction
will be a major step forward towards our aim of developing a focused
and coordinated global asset management business. We anticipate that
the transaction will be immediately accretive to Old Mutual's cash
EPS.'
James F. Orr III, United Asset Management's President and Chief
Executive Officer, said:
'The transaction with Old Mutual is a win-win deal for United Asset
Management's shareholders, affiliate firms and clients. We are very
pleased to be able to deliver the value represented by the
transaction with Old Mutual to our many long-term shareholders and to
provide our affiliate firms with the opportunity to be a part of the
dynamic Old Mutual group.'
Old Mutual has arranged financing for the transaction through
Barclays Bank plc, Royal Bank of Scotland Group and
Citibank/Schroders Salomon Smith Barney. Upon completion of the
acquisition, Old Mutual expects its gearing ratio (total debt/total
debt + shareholders' equity) to be less than 30%.
Under the agreement, Old Mutual will file a tender offer statement
and United Asset Management will file a solicitation/recommendation
statement with the U.S. Securities and Exchange Commission (SEC) and
these tender offer materials will be mailed to the shareholders of
United Asset Management. Consummation of the tender offer will be
subject to customary conditions, including acceptances by holders of
a majority of United Asset Management's outstanding shares and
receipt of regulatory and client approvals.
Investors and security holders are strongly advised to read both the
tender offer statement and the solicitation/recommendation statement,
when they become available, because they will contain important
information. Investors and security holders may obtain, for free,
copies of these statements, as well as copies of periodic reports and
other information filed with the SEC by United Asset Management at
the SEC's web site at www.sec.gov. The tender offer statement and
related materials may be obtained by directing such requests to Old
Mutual's Investor Relations Department. The
solicitation/recommendation statement and other documents filed by
United Asset Management may be obtained by visiting the United Asset
Management web site at www.uam.com.
Credit Suisse First Boston and Chase Securities Inc. acted as
financial advisors, and Weil, Gotshal & Manges LLP acted as legal
counsel, to Old Mutual. Goldman, Sachs & Co. acted as financial
advisor, and Wachtell, Lipton, Rosen & Katz acted as legal counsel,
to United Asset Management.
Old Mutual plc is a United Kingdom-based financial services group
with a substantial life assurance business in South Africa and other
southern African countries and an integrated, international portfolio
of activities in asset management, banking and general insurance.
One of the largest independent investment management organisations in
the world, United Asset Management Corporation provides a broad range
of investment management services to institutions, mutual funds and
high-net-worth investors. These services are offered through a
diverse group of operating firms that managed over $188 billion on
May 31, 2000 for clients throughout the United States, Canada and
abroad. For the twelve months ended March 31, 2000, United Asset
Management reported revenues of $904 million and EBITDA (earnings
before interest, taxes, depreciation and amortisation) of $306
million.
Forward-Looking Statements
This press release contains 'forward-looking statements.' These
statements include descriptions of United Asset Management's and Old
Mutual's expectations about the acquisition, future earnings and
other results of operations, operational plans, views of future
industry or market conditions, and other statements that include
words such as 'may,' 'expects,' 'believes,' and 'intends,' and that
describe opinions about future events.
Investors should not rely on these statements as though they were
guarantees. These statements are current only when they are made.
Neither United Asset Management's nor Old Mutual's management has any
obligation to revise or update these statements based on future
developments. Known and unknown risks, including those relating to
the integration of United Asset Management by Old Mutual, may cause
United Asset Management's and/or Old Mutual's actual results and
performances to be materially different from those expressed or
implied by these statements. Old Mutual is not subject to
the periodic reporting requirements of the SEC. Some of the risks,
uncertainties and other factors relating to United Asset Management
are that: most of United Asset Management's revenues are based on
the market value of managed assets and, therefore, will rise and fall
with changes in the economy and financial markets; the investment
management business is highly competitive; the investment management
business is susceptible to internal shifts and frequently requires
firms to adapt; and United Asset Management's affiliated firms depend
significantly on key employees. These and other risk factors are
identified and more thoroughly explained in Exhibit 99.1 to United
Asset Management's Annual Report on Form 10-K filed on March 21, 2000
with the SEC.
CONTACTS:
Old Mutual plc: United Asset Management
Corporation:
Eric Anstee, Finance Director
James Poole, Director, Investor Juliana M. Coyle (Investors)
Relations Jonathan V. Hubbard (Media)
44 207 569 0100 1 617 330 8900
College Hill - London www.uam.com
Mark Garraway
Gareth David
44 207 457 2020
College Hill - Johannesburg
Tony Friend
27 11 447 3030
www.oldmutual.com
Credit Suisse First Boston Goldman, Sachs & Co.
Andrew Gordon Milton Berlinski
Managing Director Managing Director
1 212 325 4114 1 212 902 6896
Herman Hintzen
Managing Director
44 207 888 6566
Gary Howe
Vice President
1 212 325 4125
Chase Securities Inc.
David Adler
Managing Director
1 212 270 3510
David Stawik
Vice President
1 212 270 6383
This announcement has been approved by Credit Suisse First Boston
(Europe) Limited, which is regulated by the Securities and Futures
Authority, solely for the purposes of section 57 Financial Services
Act 1986. Credit Suisse First Boston (Europe) Limited is acting for
Old Mutual plc in relation to the aforementioned transaction, is not
acting for any other person and will not be responsible to any other
person for affording the protections provided to clients of Credit
Suisse First Boston (Europe) Limited or for providing advice in
relation to the aforementioned transaction.
United Asset Management Corporation
Fact Sheet
* United Asset Management Corporation is listed on the New York
Stock Exchange under the symbol UAM
* Headquartered in Boston, with locations in 34 cities throughout
the world and approximately 2,200 employees
* $188 billion in assets under management
- $122 billion in institutional accounts, primarily in corporate
and government accounts
- $47 billion in mutual funds
- $19 billion in private accounts
* 60 no-load mutual funds
- 46 no-load equity mutual funds
- 4 no-load balanced mutual funds
- 9 no-load fixed income and money market mutual funds
- 1 no-load stable value mutual fund
* Diversified asset base across asset classes and geography
- 63% Equity
- 14% International securities
- 12% U.S. bonds and cash
- 7% Stable value
- 4% Real estate
* Affiliates include (in alphabetical order):
Acadian Asset Management, Inc. Jacobs Asset Management
Analytic Investors, Inc. L&B Realty Advisors, Inc.
Barrow, Hanley, Mewhinney &Strauss, Inc. Lincluden Management Limited
C.S. McKee & Company, Inc. Murray Johnstone Limited
Cambiar Investors, Inc. Northern Capital Management, Inc.
Campbell Group, Inc. NWQ Investment Management Company
Chicago Asset Management Company OSV Partners
Clay Finlay Inc. Pacific Financial Research, Inc.
Cooke & Bieler, Inc. Palladyne Asset Management B.V.
Dewey Square Investors Corporation Pell Rudman Trust Co., N.A.
Dwight Asset Management Company Pilgrim Baxter & Associates, Ltd.
Expertise Asset Management Provident Investment Counsel
Fiduciary Management Associates,Inc. Rice, Hall, James & Associates
First Pacific Advisors, Inc. Rogge Global Partners Plc.
GSB Investment Management, Inc. Sirach Capital Management, Inc.
Heitman Financial Company Spectrum Asset Management, Inc.
Integra Capital Management Corporation Suffolk Capital Management, Inc.
Investment Counselors of Maryland, Inc. Thompson, Siegel & Walmsley, Inc.
Investment Research Company Thomson Horstmann & Bryant, Inc.
J.R. Senecal & Associates Tom Johnson Investment Management, Inc.
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