Customers queue to draw money from an ATM outside a branch of South Africa's Nedbank in Cape Town
South Africa's Nedbank to buy back shares from minority shareholders
JOHANNESBURG (Reuters) - South Africa's Nedbank Group Ltd said on Monday it will buy back its stock from shareholders who hold less than 100 Nedbank shares as a result of a spin-off by its biggest shareholder Old Mutual.
Old Mutual, which holds 52 percent of Nedbank, has been dismantling its conglomerate structure, created after a series of acquisitions, since it moved its headquarters and primary listing to London in 1999.
As part of the plan, it spun-off a majority stake in Nedbank on Monday and now holds around 19.9 percent.
Nedbank, whose businesses include retail banking and asset management, said in September it had estimated that after the spin-off, it will have a large number of shareholders, increasing from about 20,000 to 500,000.
"For Nedbank Group it will, inter alia, reduce the complexity and ongoing administration costs associated with a significantly larger shareholder base including a sizeable number of Odd-lot holders," it said in a statement.
Odd-lot holders are shareholders who hold less than 100 Nedbank shares, estimated to be 1.5 percent of its ordinary shares in issue.
Nedbank's offer price will be at a 5 percent premium to the 10-day volume weighted average price of a Nedbank share at the close of business on Dec. 3, it said. The deal is subject to shareholder approval.
The minority shareholders will be given an opportunity to decide whether to sell their holding or retain it.
(Reporting by Nqobile Dludla, editing by Louise Heavens)
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