Shareholders representing 37,6% of short-term insurer Mutual & Federal’s (M&F) issued share capital have accepted the R17,02 per share offer from parent Old Mutual plc, far short of the 90% Old Mutual required to succeed in its minority buyout.
Announcing the results of the offer on Monday, Old Mutual said that, as a result of the acceptances, its subsidiary M&F Investments now holds 87,8% of the total issued share capital of M&F.
The controversial offer to M&F minorities closed at noon on Friday, with several influential minority shareholders such as Investec and Stanlib Asset Management saying they would not accept the offer because they regarded the price as too low. M&F’s board had already rejected the offer after an independent assessment by Rand Merchant Bank found it not to be fair and reasonable.
M&F’s shares were trading at R18 on the day the original offer of R17,50 per share (including the dividend) was first announced, and the substitute offer of R17,02 was made after the stock went ex-dividend of 48 cents per share.
M&F’s share price was last quoted on the JSE Securities Exchange at R17,50, unchanged and untraded from Friday’s close.
Commenting on the result, Old Mutual group finance director Julian Roberts said: “As part of the original offer we agreed that if our suggested scheme of arrangement was not proposed by the board of M&F, we would nevertheless acquire the 37% holding in M&F of Royal & Sun Alliance and also offer an opportunity for any minority shareholders to accept our offer for their shares should they wish to do so.
“We are very happy with the outcome, which has fulfilled our aim to increase our shareholding in M&F substantially. Old Mutual’s overall holding (including its policyholder funds) in M&F now stands at 88,1%.” — I-Net Bridge