Johannesburg - Old Mutual, Africa’s largest insurer, said it has been approached by companies interested in buying a stake in its US-based fund management unit.
“Old Mutual confirms that it has received approaches from third parties to acquire its stake,” in OM Asset Management, the London-based insurer said in a statement on Tuesday. There’s no certainty that the approaches will lead to a purchase, it said.
The company plans to split into four separate units by 2018. The asset-management unit, made up of boutique fund managers, sold shares to the public in New York in 2014 and its parent company holds almost 66 percent of the stock, according to data compiled by Bloomberg.
Read also: In-depth look at the Old Mutual split
Old Mutual is close to selling its entire stake to Affiliated Managers Group in a deal valued at about $1 billion, the Financial Times reported, citing two unidentified people familiar with the matter.
Shares rise
Old Mutual rose as much as 1 percent in London and was 0.7 percent higher at 168.4 pence as of 9:06 a.m. in the UK. The insurer has declined 5.8 percent this year, making it the best performer on the eight-member FTSE 350 Life Insurance Index which has dropped 13 percent. OMAM, which is valued at $1.67 billion, has fallen 9.5 percent this year.
After joining Old Mutual in November, CEO Bruce Hemphill said in March he had reviewed the insurer’s operations and planned to split the company up to reverse years of flagging returns. The insurer will spin off its controlling stake in South African lender Nedbank Group to shareholders and separate the US-based asset management business, its UK wealth operations and its emerging-markets unit by the end of 2018.
The emerging-markets unit, with holdings that include Old Mutual South Africa and property and casualty insurer Mutual & Federal, may be listed in Johannesburg after the breakup, Old Mutual South Africa CEO David Macready said on April 20.
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