FRIDAY, 11.00AM:
OLD MUTUAL, the giant life assurer, said on Thursday that it is to end 152 years as a mutual society and seek a listing on the Johannesburg Stock Exchange, a move which could see more than R25-billion being disbursed to policyholders.
Old Mutual chairman Mike Levett said the board had decided in principle on the demutualisation and listing, believing it will provide significant benefits to members while ensuring long-term development of the company.
“in the fast-changing world an organisation competing in the financial services indusrty requires a structure that will permit it to adapt readily to the changing needs of its … clients and to respond to new opportunities,” said Levett.
The decision to demutualise follows an international trend, with mutual societies in Australia, Britain and the United States opting to list to take advantage of expanding markets and the fast-changing financial services industry.
The action will see Old Mutual converting free assets into share capital and issuing shares to policyholders. Levett said this will allow Old Mutual to raise capital as and where needed, while creating a more flexible structure to take advantage of market changes. He added that the group is financially strong and no capital-raising exercise is envisaged.
Given Old Mutual’s strong financial position and the fact that this sort of action is usually taken as a capital-raising exercise, many analysts believe the demutualisation and listing is a prelude to a massive international deal.