The share price of diversified financial services provider Old Mutual surged 8% in brisk trade on Thursday after the company announced it would further decrease its shareholding in Nedbank to just 7.2%. In 2018, Old Mutual decreased its stake to 19.4% from a majority 53% share in Nedbank.
The shares traded 8.1% firmer at R13.96 by 11am on the JSE, with 6.2 million shares to the value of R84bn changing hands.
Old Mutual said in a shareholder announcement released after the market’s close on Wednesday that it would unbundle another 12.2% of its stake in Nedbank to shareholders.
Old Mutual said the unbundling simplifies the group, allowing investors to focus on the core operations of Old Mutual. It also allows shareholders to participate more directly in the differentiated investment cases of Old Mutual and Nedbank, while providing a substantial return of capital to shareholders, the group said.
In terms of the unbundling investors who hold 100 Old Mutual ordinary shares will receive 1 Nedbank ordinary share and a fractional entitlement to 0.31954 of a Nedbank ordinary share.
At a Nedbank price of R176 a share, the latest unbundling marks a total distribution of about R10bn to Old Mutual shareholders, reports Business Tech.
Nedbank shares traded 1.1% higher at R169.52 on the JSE.
