Johannesburg - RMB Holdings announced on Wednesday that it is considering restructuring the group.
This follows the announcement this morning by FirstRand, its wholly-owned subsidiary Momentum Group and Metropolitan Holdings that they intend merging their life assurance interests.
FirstRand, which will hold approximately 60% of the merged entity (MergeCo), intends to unbundle its entire shareholding in MergeCo to its shareholders, thereby separating it banking interests (FNB, RMB, WesBank and its African banking subsidiaries) from its life assurance interests.
RMBH holds a portfolio of strategic investments in some of South Africa's leading financial services franchises including, 30% of banking and insurance group FirstRand; 25% of health and life assurer Discovery; and 45% of personal lines insurer OUTsurance.
After the merger between Metropolitan and Momentum, RMBH will continue to own 30% of FirstRand's banking interests and approximately 18% of MergeCo.
In light of this RMBH announced that it is exploring a number of consequential restructuring steps aimed at re-aligning its strategic investment portfolio and enhancing shareholder value.
"Firstly, RMBH is investigating the appropriateness of also separating its insurance and banking interests. Such split could result in: - the separate listing of a focused banking investment entity holding RMBH's 30% interest in FirstRand's Banking Group; and - a listed insurance investment entity ("RMBH Insurance") holding inter alia RMBH's interest in MergeCo, the Discovery group and the OUTsurance group.
"In addition, RMBH is exploring with selected potential shareholders in MergeCo the possible exchange of their direct holdings in MergeCo for shares in RMBH Insurance. RMBH's aim will be to restore its effective interest in MergeCo to a level similar to that which it held prior to the merger. It is envisaged that RMBH Insurance could ultimately own more than 25% but less than 35% of MergeCo," RMBH said.
Peter Cooper, COO of RMBH commented that by splitting its strategic investment portfolio along the lines being investigated, shareholders could be given the opportunity to participate in focussed investments in two separate, investment holding companies each holding significant stakes in some of South Africa's most attractive financial brands and to continue benefiting from future value creation by the groups.
- I-Net Bridge