AGL 40.20 Decreased By ▼ -1.30 (-3.13%)
AIRLINK 129.11 Increased By ▲ 1.11 (0.87%)
BOP 6.60 Increased By ▲ 0.34 (5.43%)
CNERGY 4.03 Decreased By ▼ -0.10 (-2.42%)
DCL 8.45 Increased By ▲ 0.01 (0.12%)
DFML 41.25 Increased By ▲ 0.56 (1.38%)
DGKC 87.00 Decreased By ▼ -0.90 (-1.02%)
FCCL 33.35 Decreased By ▼ -0.75 (-2.2%)
FFBL 65.90 Decreased By ▼ -0.43 (-0.65%)
FFL 10.54 Decreased By ▼ -0.02 (-0.19%)
HUBC 110.70 Increased By ▲ 2.00 (1.84%)
HUMNL 15.23 Increased By ▲ 0.77 (5.33%)
KEL 4.78 Increased By ▲ 0.13 (2.8%)
KOSM 7.83 Increased By ▲ 0.50 (6.82%)
MLCF 41.90 Decreased By ▼ -0.82 (-1.92%)
NBP 60.50 Decreased By ▼ -0.34 (-0.56%)
OGDC 182.80 Increased By ▲ 3.83 (2.14%)
PAEL 25.36 Decreased By ▼ -0.34 (-1.32%)
PIBTL 6.26 Increased By ▲ 0.20 (3.3%)
PPL 147.81 Increased By ▲ 1.66 (1.14%)
PRL 24.56 Decreased By ▼ -0.35 (-1.41%)
PTC 16.24 Increased By ▲ 0.10 (0.62%)
SEARL 70.50 Increased By ▲ 0.30 (0.43%)
TELE 7.30 Increased By ▲ 0.08 (1.11%)
TOMCL 36.30 Increased By ▲ 0.10 (0.28%)
TPLP 7.85 Increased By ▲ 0.01 (0.13%)
TREET 15.30 Decreased By ▼ -0.29 (-1.86%)
TRG 51.70 Increased By ▲ 1.34 (2.66%)
UNITY 27.35 Increased By ▲ 0.45 (1.67%)
WTL 1.23 Decreased By ▼ -0.01 (-0.81%)
BR100 9,842 Increased By 47.4 (0.48%)
BR30 30,036 Increased By 389.6 (1.31%)
KSE100 92,520 Increased By 499.1 (0.54%)
KSE30 28,786 Increased By 121.7 (0.42%)

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.