OM to buy remaining M&F shares

Johannesburg - Old Mutual said on Wednesday that it has notified the board of directors of Mutual & Federal Insurance Company of its firm intention to make an offer to acquire all the ordinary shares in Mutual & Federal that it or its subsidiaries do not currently beneficially own.

Old Mutual is offering to acquire the shares at a price of 21.25 rand per share - equivalent to a 21.2% premium to the 30-day volume-weighted average price (VWAP) up to 13 October of 17.54 rand per Mutual & Federal share listed on the JSE, for a total consideration of approximately R1.811bn.

Old Mutual and its subsidiaries currently beneficially own approximately 73.5% of Mutual & Federal's issued ordinary share capital.

Old Mutual has received irrevocable undertakings from shareholders of Mutual & Federal representing, in the aggregate, 22.5% of the shares to which the offer relates, whereby they have undertaken to vote in favour of the Offer at the Scheme meeting to be held to approve the Scheme.

The offer is part of Old Mutual's continuing focus on driving value creation and optimising internal efficiencies. The acquisition will unlock capital synergies and leverage additional capabilities across the Group's African operations. On completion, Old Mutual expects to hold 100% of Mutual & Federal in line with its strategic objective of simplifying the structure of the Group, it said.

Commenting on the transaction, Julian Roberts, Group Chief Executive of Old Mutual, said: "This is a major step towards driving value creation between our South African businesses which is one of our key strategic priorities. 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."

- I-Net Bridge