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Old Mutual Plc Strategic Review and Withdrawal of Nedbank Group Cautionary
NEDBANK GROUP LIMITED
(Incorporated in the Republic of South Africa)
Registration number: 1966/010630/06
JSE share code: NED
NSX share code: NBK
ISIN: ZAE000004875
('Nedbank Group')
OLD MUTUAL PLC STRATEGIC REVIEW AND WITHDRAWAL OF NEDBANK GROUP
CAUTIONARY
Nedbank Group shareholders are referred to the Nedbank Group
announcement released on SENS on Monday, 7 March 2016 and to the
announcement released on SENS today by Old Mutual plc (‘Old Mutual’)
regarding Old Mutual’s new strategy to separate its underlying
businesses and to unlock value for Old Mutual shareholders (the ‘Old
Mutual Managed Separation’).
Old Mutual has been engaging with the board of directors of Nedbank
Group regarding its intention to carry out the Old Mutual Managed
Separation. Old Mutual has decided that the long-term interests of
Old Mutual shareholders and other stakeholders will be best served
by Old Mutual separating its four businesses – Old Mutual Emerging
Markets (‘OMEM’), Nedbank Group, Old Mutual Wealth (‘OMW’) and Old
Mutual Asset Management (‘OMAM’) – from each other. Old Mutual
expects that the Old Mutual Managed Separation will be materially
completed by the end of 2018.
Nedbank Group remains an independent entity listed on the
Johannesburg Stock Exchange. At 31 December 2015, Nedbank Group was
54.1% owned by Old Mutual Life Assurance Company (South Africa)
Limited and associated South African companies in the Old Mutual
group, which are in turn ultimately owned by Old Mutual.
Nedbank Group is governed, managed and operated as a South African
regulated banking entity within the Old Mutual group for the benefit
of all Nedbank Group stakeholders. It is a well-capitalised South
African bank with a strong balance sheet and a clear strategy to
deliver ongoing returns to shareholders. The announcement of the Old
Mutual Managed Separation will have no impact on the strategy or day
to day management or operations of Nedbank Group or its staff or
clients. On 2 March 2016, Nedbank Group announced its audited
results for the year ended 31 December 2015 (details available on
Nedbank Group’s website at nedbankgroup.co.za) and highlights
included growth of 9,6% in headline earnings to R10,8 billion, a
9,0% increase in net asset value per share, a 11,3% common equity
tier 1 ratio and a 7,7% increase in the full year dividend per
share.
Old Mutual and Nedbank Group recognise that their commercial
relationship continues to be a source of value underpinning
successful collaboration activities in both South Africa and the
Rest of Africa. It is therefore intended that the strategic
relationship between Nedbank Group and OMEM will continue following
the Old Mutual Managed Separation. Old Mutual and Nedbank Group
remain committed to achieving the previously announced 2017 pre-tax
synergies target of R1 billion. However, it is agreed that Old
Mutual’s majority shareholding in Nedbank Group is not necessary to
achieve either party’s strategic objectives.
In time, Old Mutual envisages reducing its interest in Nedbank Group
to an appropriate strategic minority position to underpin the future
commercial relationship. The exact mechanism to achieve any
reduction in Old Mutual’s shareholding has yet to be finally
determined. Old Mutual currently envisages reducing its shareholding
in Nedbank Group primarily by way of a distribution of Nedbank Group
shares to the shareholders of Old Mutual in an orderly manner and at
an appropriate time in the context of the Old Mutual Managed
Separation and does not intend to sell any part of its shareholding
in Nedbank Group to a new strategic investor. It is currently
intended that apart from the strategic minority shareholding in
Nedbank Group to be held by Old Mutual, the remainder of the Nedbank
Group shareholder base will be widely held by the time the Old
Mutual Managed Separation has been completed.
The boards of directors and management teams of Old Mutual and
Nedbank Group are working closely together to determine the most
effective method and appropriate timing to effect the Old Mutual
Managed Separation, in a way that safeguards the stability and
integrity of both Nedbank Group and the South African financial
services sector, including determining the level of the strategic
minority shareholding that Old Mutual will hold in Nedbank Group on
an ongoing basis post the Old Mutual Managed Separation.
The Nedbank Group cautionary announcement dated 7 March 2016 is
hereby withdrawn. Nedbank Group shareholders will be kept
appropriately informed of further developments.
Sandton
11 March 2016
Financial Advisers to Nedbank Group:
Deutsche Bank
Nedbank CIB
Legal Advisers to Nedbank Group:
ENSafrica
Sponsors to Nedbank Group in South Africa:
Merrill Lynch South Africa (Pty) Limited
Nedbank CIB
Sponsor to Nedbank Group in Namibia:
Old Mutual Investment Services (Namibia) (Pty) Ltd
Date: 11/03/2016 08:02:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
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