27 Mar 2017 07:00
Old Mutual plc
Ref 59/17
25 March 2017
old mutual plc agrees to sell a minority stake in omam to hna capital US
Old Mutual plc ("Old Mutual") today announced that it has agreed to sell a 24.95% shareholding in OM Asset Management ("OMAM") to HNA Capital US in a two-step transaction for gross cash consideration of approximately $446 million.
Following the transaction, Old Mutual's shareholding will reduce from 50.8% to 25.9%. The transaction comprises a sale of a 9.95% tranche of OMAM shares held by Old Mutual at a price of $15.30 per share and a sale of a further 15% held by Old Mutual at a price of $15.75 per share.
The completion of the first tranche is subject to antitrust clearance under the Hart-Scott-Rodino (HSR) Act in the US and is expected to take place in approximately 30 days. Completion of the second tranche is subject to receipt of certain additional regulatory approvals in various other jurisdictions and is expected to take place in the second half of 2017.
Old Mutual is not subject to any lock-up arrangements in respect of its remaining shareholding, other than its commitment to retain sufficient shares to perform its obligations with respect to this transaction. Consistent with its previous statements, Old Mutual intends to continue the reduction of its holding in OMAM in an orderly manner.
James Ritchie, Chairman of OMAM's Board of Directors, said: "We are pleased to welcome HNA Capital US as a new, supportive investor in OMAM. We remain focused on executing our growth strategy, which includes working collaboratively with our high quality Affiliates to diversify their businesses and expand their global distribution opportunities, as well as acquiring new Affiliates, to generate strong, long-term value for all of our shareholders. We look forward to working with HNA Capital US to accelerate our growth strategy for the benefit of our clients, Affiliates and shareholders."
Bruce Hemphill, Group Chief Executive of Old Mutual, said: "We are very pleased to announce this transaction which brings forward further realisation of value for Old Mutual. It represents another step in delivering our managed separation strategy and secures a strategic long-term investor for OMAM".
Guang Yang, Chief Executive of HNA Capital US, said: "OMAM is a diversified, at-scale multi-boutique asset management franchise with an attractive portfolio of high quality investment managers. We are pleased with our investment in OMAM and look forward to supporting OMAM's continued growth."
It is expected that one HNA Capital US-nominated director will join the OMAM board on the completion of the first tranche and a second on the completion of the second tranche. In both cases, these directors will replace existing nominees of Old Mutual.
OMAM is a global, multi-boutique asset management company with approximately $240 billion of assets under management as at 31 December 2016. Its diverse Affiliates offer leading, alpha generating investment products to investors around the world. OMAM recorded US GAAP earnings for 2016 of $126.4 million and Economic Net Income of $145.1 million. As at 31 December 2016, OMAM had total assets of $1,294 million.
Old Mutual will use the proceeds from the transaction for general corporate purposes.
Bank of America Merrill Lynch and Evercore acted as joint financial advisors and Skadden Arps and Linklaters as legal advisors to Old Mutual in connection with the transaction.
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Notes to Editors
Prior to publication, the information contained within this announcement was deemed to constitute inside information under the Market Abuse Regulation (EU) No 596/2014
About Old Mutual plc
Old Mutual has announced a strategy of managed separation, which will entail separating its four businesses into standalone entities. The four businesses are:
Old Mutual Emerging Markets: an attractive business with a dominant position in South Africa, well-placed to capitalise on sub-Saharan African growth as a diversified financial services provider with strong operations in key East and West African markets.
Nedbank: one of South Africa's four largest banks with very strong corporate, commercial and property finance franchises, and a growth opportunity in the retail market, as well as pan-African optionality through its stake in Ecobank Transnational Inc (ETI).
Old Mutual Wealth: a leading, integrated wealth management business, focused on the UK upper and middle market, with strong prospects in a rapidly growing £3 trillion market.
OM Asset Management: an institutionally focussed, multi-boutique asset management business, delivering strong, diversified growth in attractive asset classes through organic initiatives and acquisitions.
For the year ended 31 December 2016, Old Mutual reported an adjusted operating profit before tax of £1.7 billion and had £395 billion of funds under management. For further information on Old Mutual plc and the underlying businesses, please visit the corporate website at www.oldmutualplc.com
About HNA Capital US
HNA Capital US is the New York-based subsidiary of HNA Capital, the financial services unit of HNA Group, a Fortune Global 500 company focused on tourism, logistics and financial services. A full-service financial solutions provider, HNA Capital includes a diverse set of global businesses in equipment leasing, asset management, insurance, investment banking, securities and credit services. HNA Group is a global company with approximately $145 billion of assets, more than $46 billion in annual revenues and an international workforce of nearly 410,000 employees, primarily across North America, Europe and Asia.
For more information, please visit www.hnagroup.com.