Nedbank is proceeding with its plan to buy back the so-called odd-lot shares from the hundreds of thousands of Old Mutual shareholders who received a stake in the bank as part of the break up of Old Mutual Plc.
Shareholders representing more than 98.5% of the bank’s ordinary shares approved the odd-lot offer at a general meeting yesterday.
Old Mutual distributed most of its stake in Nedbank to shareholders as part of the managed separation of its businesses into the component parts, which also resulted in the recent unbundling UK wealth management business Quilter. Old Mutual shareholders received 3.21 Nedbank shares for every 100 shares owned in the insurance group.
While the unbundling has increased the free-float of Nedbank’s shares on the market and has removed the overhang on its share price, it’s increased the bank’s shareholder base from around 20 000 to about half a million. With the majority of its new shareholders holding less than 100 shares each, Nedbank said buying back those shares would reduce the complexity and cost of managing a significantly larger investor base. The aggregate shareholding in the bank of the odd-lot holders is estimated to be 1.5% of its shares in issue.
The bank is buying the shares back at a 5% premium to their 10-day volume weighted average price at the close of business on 3 December.
The odd-lot offer opens this morning, with the finalisation announcing, including the offer price, on Tuesday 4 December. The last date to trade to participate in the odd-lot offer will be a week later, on 11 December.
New shareholders with less than 100 shares who want to retain their holding have to elect to do so.
“Odd-lot Holders can elect to retain their Odd-lot Holdings or sell their Odd-lot Holdings at the Offer Price,” Nedbank said. ”Those Odd-lot Holders who do not make an election by 12pm on Friday, 14 December 2018 will automatically be regarded as having accepted the Odd-lot Offer and chosen to dispose of their Odd-lot Holdings.”