Old Mutual plc (OML.L), a long-term savings group, announced Wednesday its plans to acquire the remaining minority shareholding of South Africa-based Mutual & Federal Insurance Company Ltd. for a total consideration of around Rand 1,811 million or GBP 155 million. Currently, Old Mutual and its units beneficially own about 73.5% of stake in the company.
Old Mutual opined that the acquisition would disclose capital synergies and leverage additional capabilities across the group's African operations.
Old Mutual noted that its offer price is Rand 21.25 per Share, representing a 21.2% premium to the 30 day volume-weighted average price, or VWAP, up to 13 October 2009 and a total consideration of about Rand 1,811 million or GBP 155 million.
The company intends to issue new Old Mutual ordinary shares, with the number of shares being calculated based on the 30 day VWAP of Old Mutual's shares traded on the JSE up to the last practicable date before the posting of the Scheme circular to be issued by Mutual & Federal. As per Old Mutual's 30 day VWAP up to 13 October, the indicative exchange ratio would be 1.79 Old Mutual shares per Mutual & Federal share. The company expects the settlement of the offer consideration to close by the end of 2009.
The group said that 22.5% of the shareholders of Mutual & Federal have undertaken to vote in favor of the offer at the upcoming Scheme meeting.
Commenting on the deal, Julian Roberts, Chief Executive of Old Mutual, said, "We have identified specific business development opportunities and our increased ownership will enhance our ability to improve Mutual & Federal's operational performance. It also removes any remaining uncertainty about the future of the business for staff and customers."
Tuesday, Old Mutual announced the launching and pricing of a GBP 500 million fixed rate senior and unsecured Bond for general corporate purposes.
OML.L is currently trading at 111.40 pence, up 0.40 pence or 0.36%, on the LSE.
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