South Africa’s Nedbank Group to re-purchase shares from minority shareholders

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As a result of a spin-off by its biggest shareholder Old Mutual, which holds 52 percent of Nedbank, South Africa’s Nedbank Group Ltd said it will buy back its stock from shareholders who hold less than 100 Nedbank shares.

Old Mutual has been dismantling its conglomerate structure, which was created after a series of acquisitions since it moved its headquarters and primary listing to London. In a bid to continue its plan, Old Mutual spun-off a majority of its stake in Nedbank and now holds around 19.9 percent.

Nedbank said it estimates that after the spin-off, it will have a large number of shareholders, increasing from  about 20,000 to 500,000. The company, whose businesses include retail banking and asset management said “for Nedbank Group it will, inter alia, reduce the complexity and ongoing administration costs associated with a significant larger shareholder base including a sizeable number of Odd-lot holders”.

Odd-lot holders are shareholders who hold less than 100 Nedbank shares, estimated to be about 1.5 percent of its ordinary shares in issue. Nedbank’s offer price will be at a 5 percent premium to the 10-day volume weighted average price of a Nedbank share at the close of business on 3 December 2018.

Nedbank noted that minority shareholders will be given the opportunity to decide whether to sell their holding or retain it.

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