Old Mutual shares rise 2.4% to R37.69 after it Announces Sale of ‘Single Strategy’ Division

Old Mutual’s share price rose 2.4% to R37.69 on Tuesday after it announced its UK arm is selling its "single strategy" division to its management for £600m.

The group is in the process of unbundling its UK business, Old Mutual Wealth, into a separate London-listed company.

The management buyout of Old Mutual Wealth’s single strategy division is funded by private equity firm TA Associates. The division’s CEO, Richard Buxton, and most of his team will remain in the single strategy business following the buyout.

 

 

Old Mutual said the deal would involve it receiving an upfront payment of £570m cash once it had received regulatory approval and completed other customary closing conditions. About another £30m would be paid between 2019 and 2021, subject to performance conditions.

"Ahead of our managed separation and proposed listing in 2018, we are pleased that we have completed the strategic review of the single strategy business and agreed terms for a transaction with TA Associates," said Old Mutual Wealth CEO Paul Feeney.

"As we outlined in the showcase event in November, the single strategy business is less closely aligned to our goal of becoming the UK’s leading wealth manager. I believe this development is a good outcome for our shareholders and provides the single strategy team with a great opportunity to build on the success they have achieved since 2012."
Old Mutual Wealth said the sale would not affect its multi-asset business, which will be rebranded as Quilter Investors during 2018.

"Led by Paul Simpson, CEO, this business is a core part of the Old Mutual Wealth strategy, delivering leading investment solutions to a wide number of UK and international retail clients through Old Mutual Wealth’s significant distribution footprint," Old Mutual said in Tuesday’s statement.