Proposal to acquire a control
23 August 2010
PROPOSAL TO ACQUIRE A CONTROLLING STAKE IN NEDBANK GROUP
Introduction
Old Mutual plc ("Old Mutual") wishes to announce that it has received a proposal from HSBC Holdings plc ("HSBC") to acquire a controlling shareholding in Nedbank Group Limited ("Nedbank Group") ("the proposed transaction" or "the proposal"). The proposal follows a detailed review by Old Mutual Group of its various options with respect to its shareholding in Nedbank Group.
The proposed transaction, if and when it proceeds, would be implemented by way of a partial offer to all Nedbank Group shareholders to acquire up to 70% of the Nedbank Group shares. The making of a binding offer by HSBC is subject to a number of pre-conditions. In order to satisfy these pre-conditions, a period of exclusivity has been granted by Old Mutual Group to HSBC. Any acceptance by Old Mutual of any offer that may be made would be subject, inter alia, to approval by Old Mutual's shareholders.
Old Mutual has had preliminary discussions with the South African regulatory authorities about the merits of the transaction, but recognises that these parties, as well as the Nedbank Group board, will have to consider the merits of the proposed transaction. The relevant parties will make the necessary formal applications in this regard in due course.
There can be no certainty that the proposal which Old Mutual has received from HSBC will lead to a transaction.
Rationale for the proposed transaction and benefits for Old Mutual Group
The proposed transaction would represent a major step in delivering the Old Mutual Group's strategy as set out in March 2010 to reduce the Group's complexity whilst building a cohesive long-term savings, protection and investment group by leveraging the strengths of the Old Mutual Group's capabilities in South Africa and beyond. The proceeds would be partially reinvested in South Africa and partially in various emerging markets via Old Mutual SA, as well as being applied to meaningfully reduce existing Old Mutual Group debt.
Benefits for South Africa
Old Mutual believes that the proposed transaction, if implemented, is likely to result in a material strengthening of South Africa's financial sector, foreign direct investment by HSBC in the banking sector and material incremental investment by Old Mutual in the long-term savings sector. Further benefits are expected to include an improvement in the long term capital and current account inflows to South Africa. Old Mutual also believes the proposed transaction would enable it to increase its support in favour of South Africa's national objectives of broad-based black economic empowerment, job creation, education, training and skills transfer.
Benefits for Nedbank Group
Nedbank Group's initial assessment of the proposed transaction is that HSBC represents an attractive international banking partner and shareholder of reference and has the potential to provide Nedbank Group with benefits which should enhance Nedbank Group's ability to strengthen its position in the South African banking sector. Nedbank Group believes that there is a substantial opportunity for it to expand both within the South African and African markets in due course.
Details of the process
The proposal contains a number of pre-conditions which it would be necessary to satisfy prior to the partial offer being made, including due diligence of Nedbank Group by HSBC, receipt of approval from the South African Reserve Bank ("SARB") for the remittance outside South Africa of a proportion of the disposal proceeds to be received by Old Mutual, and a number of regulatory and other approvals such as the approval of the Registrar of Banks and the Minister of Finance.
Acceptance of any partial offer would require shareholder approvals by Old Mutual and Nedbank Group and, specifically, receipt of approval from the SARB for the externalisation of £1.5 billion of proceeds by Old Mutual. The parties will co-operate with the authorities to ensure that any foreign currency flows that may be associated with the proposed transaction are managed in a way that will not be disruptive to the South African foreign exchange market.
Further communications
Old Mutual will communicate further material developments in this regard in due course.
For further information on Old Mutual plc, please visit the corporate website at www.oldmutual.com
Enquiries
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External Communications |
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Patrick Bowes |
UK |
+44 (0)20 7002 7440 |
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Investor Relations |
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Deward Serfontein |
SA |
+27 (0)82 810 5672 |
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Aleida White |
UK |
+44 (0)20 7002 7287 |
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Media |
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Don Hunter (Finsbury) |
UK |
+44 (0)20 7251 3801 |
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Mike Smith (Finsbury) |
UK |
+44 (0)20 7251 3801 |
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Rob Pinker (Brunswick) |
SA |
+27 (0)11 507 7300 |
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Marina Bidoli (Brunswick) |
SA |
+27 (0)11 507 7300 |
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Notes to Editors
Old Mutual
Old Mutual plc is an international long-term savings, protection and investment Group. Originating in South Africa in 1845, the Group provides life assurance, asset management, banking and general insurance in Europe, the Americas, Africa and Asia. Old Mutual plc is listed on the London Stock Exchange and the JSE, among others.
In the year ended 31 December 2009, the Old Mutual Group reported adjusted operating profit before tax of £1.2 billion (on an IFRS basis) and had £285 billion of funds under management at the year end. The Old Mutual Group has approximately 54,000 employees.
This information is provided by RNS
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