Wrap Text
Unbundling by Old Mutual of a portion of its shareholding in Nedbank Group Limited
Old Mutual Limited
Incorporated in the Republic of South Africa
Registration number: 2017/235138/06
ISIN: ZAE000255360
LEI: 213800MON84ZWWPQCN47
JSE Share Code: OMU
LSE Share Code: OMU
NSX Share Code: OMM
MSE Share Code: OMU
ZSE Share Code: OMU
("Old Mutual" or “the Company”)
Ref 16/21
23 June 2021
UNBUNDLING BY OLD MUTUAL OF A PORTION OF ITS SHAREHOLDING IN NEDBANK GROUP
LIMITED
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO THE
UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR ANY JURISDICTION WHERE IT IS
UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT.
This announcement does not constitute an offer or form part of any offer or invitation to purchase, subscribe
for, sell or issue, or a solicitation of any offer to purchase, subscribe for, sell or issue, any securities (whether
pursuant to this announcement or otherwise) in any jurisdiction, including an offer to the public or section
of the public in any jurisdiction. This announcement does not comprise a prospectus.
DIVIDEND DECLARATION
The board of directors (“Board”) of Old Mutual is pleased to announce that Old Mutual will, subject to
obtaining all requisite regulatory approvals, including Prudential Authority approval, unbundle a portion of
its shareholding (“Nedbank Stake”) in the issued ordinary share capital of Nedbank Group Limited
(“Nedbank”) to the ordinary shareholders of Old Mutual (“Shareholders”). Old Mutual will unbundle all the
Nedbank ordinary shares currently held by Old Mutual Emerging Markets Limited (being 62,131,692
Nedbank ordinary shares and comprising 12.2% of the issued ordinary share capital of Nedbank) to
Shareholders by way of a distribution in specie in terms of section 46(1)(a)(ii) of the Companies Act No. 71
of 2008 (the “Unbundling”).
OVERVIEW AND RATIONALE OF THE UNBUNDLING
Following conclusion of Old Mutual’s managed separation process in 2018, Old Mutual retained a minority
shareholding in Nedbank which represents c.19.4% of the Nedbank ordinary shares currently in issue. This
level of the Nedbank Stake was determined through discussions with Nedbank and the relevant regulators
at the time in order to, amongst other things:
- ensure cohesive alignment with the ongoing arms’ length commercial arrangements between Old
Mutual and Nedbank; and
- support the capital structure of the Old Mutual group (the “Group”), in particular within Old Mutual Life
Assurance Company (South Africa) Limited (“OMLACSA”), whilst implementing changes required by
the Insurance Act which took effect from 1 July 2018.
Old Mutual was committed to being a significant minority shareholder of Nedbank (with the right to nominate
a director to the boards of Nedbank and Nedbank Limited) whilst retaining a right to review the Nedbank
Stake as appropriate from time to time, in accordance with the protocols outlined in the relationship
agreement concluded between Nedbank and Old Mutual on 19 April 2018.
Following an internal review of the Nedbank Stake, the Board believes that it is in the best interests of
Shareholders to dispose of a majority of its Nedbank stake through the Unbundling, as this:
- simplifies the Group, allowing investors to focus on the core operations of Old Mutual;
- allows Shareholders to participate more directly in the differentiated investment cases of Old Mutual
and Nedbank; and
- provides a substantial return of capital to Shareholders.
The remaining Nedbank Stake, held by OMLACSA (comprising c.7.2% of the Nedbank ordinary shares
currently in issue) continues to support the capital structure of OMLACSA and will be optimally managed in
line with the Group’s Financial Management Framework.
Each Shareholder will receive Nedbank ordinary shares (which are listed on the Johannesburg Stock
Exchange and the Namibian Stock Exchange) in the ratio illustrated below:
For every 100 1.31954
Old Mutual => Nedbank
Ordinary Ordinary
Shares Shares
The distribution of Nedbank ordinary shares to Shareholders could result in recipients receiving fractional
entitlements to Nedbank ordinary shares. For example, if you hold 100 Old Mutual ordinary shares, you will
receive 1 Nedbank ordinary share and a fractional entitlement to 0.31954 of a Nedbank ordinary share.
Such fractional entitlements will be sold in the market in accordance with the Listings Requirements of the
Johannesburg Stock Exchange, with the proceeds of the sale (“Cash Proceeds”) being paid to the relevant
Shareholders. Shareholders on Old Mutual’s Namibian share register, Malawian share register, UK share
register and Zimbabwean share register will be paid the local currency cash equivalents of the Cash
Proceeds. The Cash Proceeds will be converted to local currency at the effective rate quoted by Old Mutual
on or before the date upon which payment of the Cash Proceeds is made to the relevant Shareholders
("Applicable Rate").
The Unbundling will be implemented in accordance with the provisions of Old Mutual's memorandum of
incorporation.
NEDBANK
Nedbank is a diversified financial services provider offering a wide range of wholesale and retail banking
services, as well as insurance, asset management and wealth management solutions. It delivers its
products and services through four main business clusters: (i) Nedbank Corporate and Investment Banking,
(ii) Nedbank Retail and Business Banking, (iii) Nedbank Wealth and (iv) Nedbank Africa Regions.
Nedbank ranks as a top-5 bank by capital on the African continent and Ecobank Transnational Incorporated
(Ecobank), in which Nedbank holds a 21% shareholding, ranks within the top-10 banks by assets on the
African continent. Nedbank is South Africa's fifth-largest bank by market capitalisation and fourth largest by
total assets and headline earnings. It is a leading corporate bank and a market leader in commercial
property and renewable energy finance and has a strong position in household motor finance, household
deposits and card acquiring. It operates a unique asset management model as part of an integrated wealth
management business. Through its pan-African banking alliance with Ecobank, Nedbank provides its
customers access to Africa's widest banking network.
For further information on Nedbank, Shareholders are referred to Nedbank's public disclosures. Nedbank’s
public disclosures are not part of this announcement and are not incorporated by reference herein.
TAX CONSIDERATIONS
The tax consequences of the Unbundling applicable to Shareholders will depend on the individual
circumstances of each Shareholder. Accordingly, Shareholders are advised to obtain independent tax
advice in relation to the tax consequences (if any) of the Unbundling on them.
Shareholders are advised that the Board has resolved to give effect to the distribution in specie of the
Nedbank ordinary shares on the basis that:
- the distribution to South African corporate shareholders (as contemplated in section 64F(1)(a) of
the Income Tax Act 58 of 1962 (that is “a company which is a resident” for tax purposes in South
Africa) (referred to as “SA Corporate Shareholders”)) shall be paid as a dividend in specie; and
- the distribution to all other Shareholders (i.e. South African tax resident individuals and trusts as
well as non-South African tax resident ordinary shareholders) shall be paid as a return of capital
out of Old Mutual’s contributed tax capital,
provided that should any requirement be imposed on Old Mutual pursuant to a change in relevant South
African tax legislation prior to the date of publication of the finalisation announcement, which is expected to
be published before 11.00 a.m. (South African time) on or about Tuesday, 26 October 2021 (“Finalisation
Announcement”) that would require all Shareholders within the same class of shares to share equally in
the allocation of contributed tax capital as a result of any distribution, then the Board has resolved that the
distribution in specie shall be treated as a return of capital out of Old Mutual's contributed tax capital for all
Shareholders.
SA Corporate Shareholders who receive the distribution as a dividend in specie are exempt from dividends
tax and will obtain a base cost equivalent to the market value of the unbundled Nedbank ordinary shares
on the Unbundling distribution date, expected to be on or about Monday, 8 November 2021 (“Unbundling
Distribution Date”).
All other Shareholders who receive the distribution as a return of capital will be required to reduce the base
cost of their Old Mutual ordinary shares by the market value of the unbundled Nedbank ordinary shares on
the Unbundling Distribution Date. The base cost of the unbundled Nedbank ordinary shares would be
equivalent to the market value of the unbundled Nedbank ordinary shares on the Unbundling Distribution
Date. Note if the tax legislation changes and the distribution to all Shareholders is made out of contributed
tax capital, then the SA Corporate Shareholders would also be required to reduce the base cost of their
Old Mutual ordinary shares by the market value of the unbundled Nedbank ordinary shares on the
Unbundling Distribution Date.
A summary of the tax consequences of the Unbundling for Shareholders will be included in the Finalisation
Announcement.
EXCHANGE CONTROL CONSIDERATIONS AND MANNER OF DELIVERY OF THE NEDBANK
SHARES
A summary of the exchange control considerations and the manner in which the unbundled Nedbank
ordinary shares will be delivered to or for the benefit of Shareholders will be included in the Finalisation
Announcement.
SALIENT DATES AND TIMES
Subject to Old Mutual having obtained all requisite regulatory approvals, the Unbundling will take place at
9:00 a.m. (SA time) on Monday, 8 November 2021. Set out below are the indicative dates and times (South
African standard time unless otherwise stated) applicable to the Unbundling. All dates and times below are
subject to change and any changes will be published on the Johannesburg Stock Exchange's (“JSE”) Stock
Exchange News Service (“SENS”), the London Stock Exchange's Regulatory News Service (“RNS”) and
the news services of the Malawi Stock Exchange (“MSE”), the Namibian Stock Exchange (“NSE”) and the
Zimbabwe Stock Exchange (“ZSE”).
Event Date and time
(2021)
Finalisation Announcement expected to be published at 11.00 a.m. on Tuesday,
26 October
Expected last day for transfers between the SA share register, UK share Tuesday, 26 October
register, Namibian share register, Malawian share register and
Zimbabwean share register in order to participate in the Unbundling
Expected last day to trade on the SA share register, Namibian share Tuesday, 2 November
register, Malawian share register and Zimbabwean share register in order
to participate in the Unbundling
Expected last day to trade on the UK share register in order to participate Wednesday, 3 November
in the Unbundling
Old Mutual ordinary shares expected to trade “ex” entitlement on the SA Wednesday, 3 November
share register, Malawian share register, Namibian share register and
Zimbabwean share register in order to receive the unbundled Nedbank
ordinary shares
Old Mutual ordinary shares expected to trade “ex” entitlement on the UK Thursday, 4 November
share register to receive the unbundled Nedbank ordinary shares
Announcement expected regarding the Cash Proceeds and the Applicable 11.00 a.m. on Thursday,
Rate in respect of fractional entitlements published at 4 November
Expected record date 12.00 p.m. on Friday, 5
November
Expected transfers between share registers opened at the commencement 09.00 a.m. on Monday, 8
of trade at November
Unbundling expected to be implemented at 09.00 a.m. on Monday, 8
November
Shareholders’ accounts at CSDP or broker expected to be updated and Monday, 8 November
credited on
Share certificates in respect of unbundled Nedbank ordinary shares Thursday, 11 November
expected to be despatched on
Notes:
1. Shareholders should anticipate their holdings of Old Mutual ordinary shares at the record date and time
by taking into account all unsettled trades concluded on or before the last day to trade which are due to
be settled on or before the record date and time.
2. Share certificates may not be dematerialised or rematerialized between Wednesday, 3 November 2021
and Friday, 5 November 2021, both days inclusive.
OLD MUTUAL POST THE UNBUNDLING
The Group’s Nedbank Stake currently comprises approximately 19.4% of the issued ordinary share capital
of Nedbank, as held in the Group's shareholder funds. Net of the Unbundling, the Group will hold
36,781,960 ordinary shares in Nedbank, constituting c. 7.2% of the current issued ordinary share capital of
Nedbank (which will be held by OMLACSA in its shareholder funds).
Old Mutual ordinary shares in issue as at the date of declaration of the Unbundling: 4,708,553,649
Old Mutual income tax number: 9267358233
Financial Advisor
Merrill Lynch South Africa (Pty) Limited t/a BofA Securities
Sponsors
Johannesburg Stock Exchange Merrill Lynch South Africa (Pty) Limited t/a BofA Securities
Namibia PSG Wealth Management (Namibia) (Proprietary) Limited
Malawi Stockbrokers Malawi Limited
Zimbabwe Imara Capital Zimbabwe plc
Enquiries
Investor Relations
Sizwe Ndlovu T: +27 (0)11 217 1163
Head of Investor Relations M: +27 (83) 500 8019
E: tndlovu6@oldmutual.com
Communications:
Alleyne Smith T: +27 (0)11 217 1506
Senior Communications Manager: M: +27 (72) 733 0911
E: ASmith11@oldmutual.com
Group Marketing, Public Affairs and
Sustainability
Notes to Editors
About Old Mutual
Old Mutual is a premium African financial services group that offers a broad spectrum of financial solutions
to retail and corporate customers across key market segments in 14 countries. Old Mutual's primary
operations are in South Africa and the Rest of Africa, and it has a niche business in China. With over 176
years of heritage across sub-Saharan Africa, Old Mutual is a crucial part of the communities it serves and
broader society on the continent.
For further information on Old Mutual, and its underlying businesses, please visit the corporate website at
www.oldmutual.com.
Date: 23-06-2021 05:45:00
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