Old Mutual has responded to reports it is close to a deal to sell its US asset management business to New York-listed Affiliated Managers Group, confirming it has “received approaches from third parties”.
This morning the Financial Times reported the financial group’s board has endorsed the transaction, which would involve exchange of its 66 per cent stake in Old Mutual Asset Management (OMAM) for cash and a 10 per cent stake in AMG.
The OMAM stake is valued around $1bn and proceeds from a sale would be used to pay down debt in the UK business, the Financial Times reported, quoting two anonymous sources.
In a statement, Old Mutual says: “There can be no certainty that these approaches will lead to any transaction or any certainty as to the terms on which any such transaction might proceed.”
The asset management deal would reportedly pave the way for the sale of 10 per cent of Old Mutual Wealth via IPO next year. Private equity firms have also shown interest in the UK wealth management business, the Financial Times reported.
The remaining 90 per cent would be distributed to the parent group’s shareholders via the London and Johannesburg stock exchange. The rest of the group would then relocate to South Africa, it was reported.
In March, Old Mutual confirmed it was looking to split its business along four lines: Old Mutual Wealth, South African lender Nedbank, the South African Old Mutual Emerging Markets business and its US institutional asset management arm OM Asset Management.
It confirmed it intended to break itself up into four businesses by the end of 2018.
Old Mutual today confirmed it is “continuing to assess the options available” and would update the market “as and when appropriate”.
“As a consequence of the decision to proceed with the managed separation of Old Mutual, we expect to receive interest in our assets periodically.”