Old Mutual prepares break-up; receives offer for wealth unit from Warburg Pincus and Cinven - report
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Old Mutual, the Anglo-South African financial-services giant, is preparing a break-up which may be outlined alongside the group’s annual results next week, Sky News reported. Inside sources cited in the report warned that the plan is not likely to reach fruition for many months and the proposal has not yet been finalised.
The break-up plan involves the formation of several standalone entities - Old Mutual's UK-focused wealth arm, its South Africa-based emerging-markets business, its stake in the South African lender Nedbank and its New York-listed OM Asset Management unit, including the rump of Old Mutual’s holding in the division, the report said.
The buyout firms Warburg Pincus and Cinven are believed already to have jointly made a bid of several billion pounds for Old Mutual Wealth, which operates brands including Old Mutual Global Investors and Quilter Cheviot, the item reported. While a sale of that business appears inevitable, it is not known what the board of Old Mutual intends to do with the other standalone companies, the report said.
Chief Executive Bruce Hemphill is believed to have mandated advisers to kickstart the break-up plan not long after taking up his post last November, the report said. The board is believed to be advised by Rothschild, and in-house brokers Goldman Sachs and Bank of America Merrill Lynch are also expected to participate in any disposals and restructuring activities, the report said.
Old Mutual has a GBP 8.8bn (USD 12.5bn) market cap, the item noted.