AGL 40.00 No Change ▼ 0.00 (0%)
AIRLINK 129.06 Decreased By ▼ -0.47 (-0.36%)
BOP 6.75 Increased By ▲ 0.07 (1.05%)
CNERGY 4.49 Decreased By ▼ -0.14 (-3.02%)
DCL 8.55 Decreased By ▼ -0.39 (-4.36%)
DFML 40.82 Decreased By ▼ -0.87 (-2.09%)
DGKC 80.96 Decreased By ▼ -2.81 (-3.35%)
FCCL 32.77 No Change ▼ 0.00 (0%)
FFBL 74.43 Decreased By ▼ -1.04 (-1.38%)
FFL 11.74 Increased By ▲ 0.27 (2.35%)
HUBC 109.58 Decreased By ▼ -0.97 (-0.88%)
HUMNL 13.75 Decreased By ▼ -0.81 (-5.56%)
KEL 5.31 Decreased By ▼ -0.08 (-1.48%)
KOSM 7.72 Decreased By ▼ -0.68 (-8.1%)
MLCF 38.60 Decreased By ▼ -1.19 (-2.99%)
NBP 63.51 Increased By ▲ 3.22 (5.34%)
OGDC 194.69 Decreased By ▼ -4.97 (-2.49%)
PAEL 25.71 Decreased By ▼ -0.94 (-3.53%)
PIBTL 7.39 Decreased By ▼ -0.27 (-3.52%)
PPL 155.45 Decreased By ▼ -2.47 (-1.56%)
PRL 25.79 Decreased By ▼ -0.94 (-3.52%)
PTC 17.50 Decreased By ▼ -0.96 (-5.2%)
SEARL 78.65 Decreased By ▼ -3.79 (-4.6%)
TELE 7.86 Decreased By ▼ -0.45 (-5.42%)
TOMCL 33.73 Decreased By ▼ -0.78 (-2.26%)
TPLP 8.40 Decreased By ▼ -0.66 (-7.28%)
TREET 16.27 Decreased By ▼ -1.20 (-6.87%)
TRG 58.22 Decreased By ▼ -3.10 (-5.06%)
UNITY 27.49 Increased By ▲ 0.06 (0.22%)
WTL 1.39 Increased By ▲ 0.01 (0.72%)
BR100 10,445 Increased By 38.5 (0.37%)
BR30 31,189 Decreased By -523.9 (-1.65%)
KSE100 97,798 Increased By 469.8 (0.48%)
KSE30 30,481 Increased By 288.3 (0.95%)

Insurer Old Mutual said on Tuesday it had called off talks to sell its stake in Mutual & Federal to Royal Bafokeng Holdings. Old Mutual, which owns just under 75 percent of M&F, said it and RBH "were unable to agree mutually acceptable terms in the current environment".
M&F's shares fell 6.1 percent to 21.50 rand at 0915 GMT. Old Mutual lost 0.8 percent to 17.56 rand on Johannesburg's Top-40 index, which was off 0.3 percent. In London, Old Mutual was up 1.6 percent. Old Mutual shares have fallen around 14 percent since its results in late February, suggesting failure to agree on terms had already been priced in by investors, Raghu Hariharan, an analyst at Fox-Pitt, Kelton said.
"For Old Mutual it's clearly a negative. For the time being they don't have a Plan B with M&F. They may continue to hold it but they've already said it's a non-core business and one that is potentially deteriorating as we speak," Hariharan said.
"Also, the proceeds were to be used to fund buybacks." South Africa's largest insurer said in November the indicative offer it had received from RBH for a 60 to 70 percent stake in M&F was worth 27.5 rand a share, which would have netted Old Mutual around $850 million.
The deal was expected to be wrapped up by the end of last year, but Old Mutual said at its results on February 27 that talks were continuing and it hoped to conclude the sale of its stake in M&F by the end of this year. "It (the deal) wasn't going to be great in value for Old Mutual at that price," a trader at Investec said.
"Old Mutual now needs to improve on the operations performance at Mutual and Federal." RBH is the investment firm of South Africa's Royal Bafokeng Nation, one of the richest tribal groupings in the country due to a steady stream of royalties from platinum mines.

Copyright Reuters, 2008

Comments

Comments are closed.