| Wed 14 Oct 2009, 9:21 | | OML - Old Mutual Plc - Proposed acquisition of the remaining minority |
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OML
OLOML
OML - Old Mutual Plc - Proposed acquisition of the remaining minority
shareholding in Mutual & Federal
OLD MUTUAL PLC
ISIN CODE: GB0007389926
JSE SHARE CODE: OML
NSX SHARE CODE: OLM
ISSUER CODE: OLOML
PROPOSED ACQUISITION OF THE REMAINING MINORITY SHAREHOLDING IN MUTUAL & FEDERAL
Old Mutual plc ("Old Mutual" or the "Group") is pleased to announce that it has
notified the board of directors of Mutual & Federal Insurance Company Limited
("Mutual & Federal") of its firm intention to make an offer, in terms of the
South African Securities Regulation Code on Takeovers and Mergers, to acquire
all the ordinary shares in Mutual & Federal that it or its subsidiaries do not
currently beneficially own (the "Shares"), to be implemented by way of a scheme
of arrangement in terms of section 311 of the South African Companies Act, 1973
(the "Scheme" or "Offer"). Old Mutual and its subsidiaries currently
beneficially own approximately 73.5 per cent. of Mutual & Federal`s issued
ordinary share capital.
Old Mutual has received irrevocable undertakings from shareholders of Mutual &
Federal representing, in the aggregate, 22.5 per cent. of the shares to which
the Offer relates, whereby they have undertaken to vote in favour of the Offer
at the Scheme meeting to be held to approve the Scheme.
Old Mutual is offering to acquire the Shares at a price of R21.25 per Share (the
"Offer Price"), equivalent to a 21.2 per cent. premium to the 30 day volume-
weighted average price ("VWAP") up to 13 October 2009 of R17.54 per Mutual &
Federal share listed on the JSE Limited ("JSE"), for a total consideration of
approximately R1,811 million or GBP155 million, (the "Offer Consideration"). Old
Mutual intends to settle the Offer Consideration by way of an issue of new Old
Mutual ordinary shares, with the number of shares being calculated based on the
30 day VWAP of Old Mutual`s shares traded on the JSE up to the last practicable
date prior to the posting of the Scheme circular to be issued by Mutual &
Federal. Based on Old Mutual`s 30 day VWAP up to 13 October 2009 of R11.87 per
Old Mutual share, the indicative exchange ratio would be 1.79 Old Mutual shares
per Mutual & Federal share. Settlement of the Offer Consideration is expected by
the end of 2009.
The Offer is part of Old Mutual`s continuing focus on driving value creation and
optimising internal efficiencies. The acquisition will unlock capital synergies
and leverage additional capabilities across the Group`s African operations. On
completion, Old Mutual expects to hold 100% of Mutual & Federal in line with its
strategic objective of simplifying the structure of the Group.
Mutual & Federal is an authorised financial services provider which operates
primarily in South Africa. Its principal market is the short-term insurance
sector, which offers insurance-related services to brokers, agents and their
clients. For the 12 month period ended 31 December 2008, Mutual & Federal
generated gross premiums of R9.16 billion and a loss before tax of R55 million.
As at 30 June 2009, Mutual & Federal`s shareholder equity (net of minorities)
was R3.20 billion or R11.44 per Mutual & Federal share.
Commenting on the transaction, Julian Roberts, Group Chief Executive of Old
Mutual, said:
"This is a major step towards driving value creation between our South African
businesses which is one of our key strategic priorities. We have identified
specific business development opportunities and our increased ownership will
enhance our ability to improve Mutual & Federal`s operational performance. It
also removes any remaining uncertainty about the future of the business for
staff and customers."
A separate announcement regarding the Offer has been released today on the JSE
by Mutual & Federal and can be found on Mutual & Federal`s website at
www.mf.co.za.
For further information on Old Mutual plc, please visit the corporate website at
www.oldmutual.com
Enquiries
Old Mutual plc Investor Relations
Patrick Bowes UK +44 (0) 20 7002 7440
Deward Serfontein SA +27 (0) 82 810 5672
Old Mutual plc Media
Matthew Gregorowski UK / SA +44 (0) 20 7002 7133
+44 (0) 7748 183 834
Don Hunter (Finsbury) UK +44 (0) 20 7251 3801
Bank of America Merrill Lynch
Marcus Heilner SA +27 (0) 11 305 5873
Julia Benadie SA +27 (0) 11 305 5825
14 October 2009
Sponsor
Merrill Lynch South Africa (Pty) Limited
Notes
1. Exchange rate of ZAR 11.6802 = GBP1 (Source: Bloomberg currency fix as at
18:00 (London time) on the date prior to this announcement)
2. The Offer Consideration of approximately R1,811 million or GBP155 million
is based on Mutual & Federal ordinary shares in issue and to be issued of
319,900,015, less the 234,679,392 Mutual & Federal ordinary shares
currently beneficially held by Old Mutual and its subsidiaries.
Old Mutual
Old Mutual plc is a leading international long-term savings 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 2008, the Group reported adjusted operating profit
of GBP1.0 billion (on an IFRS basis) and had GBP265 billion of funds under
management at the year end. The Group has approximately 57,000 employees.
Date: 14/10/2009 09:21:15 Produced by the JSE SENS Department.
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