Old Mutual shares surge on £9 billion break-up plans

On the ball: (from left) England players Sarah Hunter, Joe Launchbury and Mike Brown at the launch of the 2016 Old Mutual Wealth Series

Harry Engels/Getty Images

Michael Bow

7 March 2016

England rugby sponsor and insurance giant Old Mutual shot up in trading after confirming it was mulling a £9 billion carve up of the business but added: “no decision has yet been made”.

Shares jumped to the top of the FTSE 100 leader board adding 9.5%, or 15.10p, to 194.80p after it said “all options” were being considered for an overhaul of the firm.

Old Mutual was responding to weekend reports boss Bruce Hemphill will break up the four-pronged business. An announcement is due with annual results this Friday.

Hemphill has been conducting a review of the firm since taking the reins in November. Its four components are: Africa-focused finance arm, Old Mutual Emerging Markets, London-based money manager, Old Mutual Wealth, a 54% stake in South African bank Nedbank and 67% of US-listed Old Mutual Asset Management.

One option involves hiving off Old Mutual Wealth and either listing it in London or selling it.

Private equity firms are reportedly interested in buying the division, which is valued at about £4 billion by analysts and has prospered in the wake of UK pension reforms.

Old Mutual, which was founded in 1845, would subsequently de-list from the FTSE 100 but keep a Johannesburg listing for the remaining bits of the firm. Sources said keeping with the status quo is still an option.

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