Old Mutual Limited Cash proceeds - fractional entitlements (3388R)

TIDMOMU

RNS Number : 3388R

Old Mutual Limited

04 November 2021

Old Mutual Limited

Incorporated in the Republic of South Africa

Registration number: 2017/235138/06

ISIN: ZAE000255360

LEI: 213800MON84ZWWPQCN47

JSE Share Code: OMU

LSE Share Code: OMU

NSX Share Code: OMM

MSE Share Code: OMU

ZSE Share Code: OMU

("Old Mutual" or "the Company" or the "Group")

Ref 26 /21

4 November 2021

CASH PROCEEDS IN RESPECT OF FRACTIONAL ENTITLEMENTS AND APPLICABLE RATE

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES, CANADA, AUSTRALIA OR JAPAN OR ANY JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT.

Unless otherwise defined, all capitalised terms used in this announcement shall bear the same meanings in the finalisation announcement published on Tuesday, 26 October 2021 ("Finalisation Announcement").

This announcement does not constitute an offer or form part of any offer or invitation to purchase, subscribe for, sell or issue, or a solicitation of any offer to purchase, subscribe for, sell or issue, any securities (whether pursuant to this announcement or otherwise) in any jurisdiction, including an offer to the public or section of the public in any jurisdiction. This announcement does not comprise a prospectus.

   1.   Background

Old Mutual Shareholders are referred to the Unbundling Announcement and the Finalisation Announcement wherein it was announced that Old Mutual will unbundle all of the Nedbank Shares held by Old Mutual Emerging Markets Proprietary Limited (being 62,131,692 Nedbank Shares and comprising 12.2% of the issued ordinary share capital of Nedbank as at 26 October 2021) to Old Mutual Shareholders by way of a distribution in specie in terms of section 46(1)(a)(ii) of the Companies Act, No. 71 of 2008 (the "Unbundling") on Monday, 8 November 2021.

The salient dates and times included in the Finalisation Announcement remain unchanged.

In terms of the Unbundling, each Old Mutual Shareholder will receive 1.31954 Nedbank Shares (which are listed on the Johannesburg Stock Exchange and the Namibian Stock Exchange), for every 100 Old Mutual shares held on the relevant securities register of Old Mutual as at 8.00 p.m. (SA time) / 6.00 p.m. (UK time) on Friday, 5 November 2021 ("Record Time"). The distribution of the Unbundled Nedbank Shares to Old Mutual Shareholders in the ratio above may result in fractional entitlements for the recipients.

   2.   CASH PROCEEDS AND FRACTIONAL ENTITLEMENTS

In accordance with the JSE Listings Requirements and as outlined in paragraph 3.2 of the Finalisation Announcement, fractional entitlements to the Unbundled Nedbank Shares will be rounded down to the nearest whole number and the aggregated fractions of the Unbundled Nedbank Shares to which Old Mutual Shareholders are entitled will not be transferred to them but will instead be sold in the market as soon as practicable after the Unbundling.

Old Mutual Shareholders will accordingly receive monetary compensation in respect of their fractional entitlements to the Unbundled Nedbank Shares. In accordance with the JSE Listings Requirements, this amount has been determined with reference to the volume weighted average price in Rand of a Nedbank Share traded on the JSE on Wednesday, 3 November 2021, ZAR177.20697 (being the first day on which Old Mutual shares traded 'ex' the entitlement to receive the Unbundled Nedbank Shares) reduced by 10% ("Cash Proceeds"). On this basis, Old Mutual Shareholders are advised that the Cash Proceeds due to Old Mutual Shareholders in respect of any fractional entitlement is ZAR159.48627 (ZAR177.20697 x 0.9) per Unbundled Nedbank Share.

The Cash Proceeds will be paid (i) by Old Mutual to the relevant registered Old Mutual Shareholders that hold their Old Mutual shares in certificated form and (ii) by a nominee or CSDP to the Relevant Old Mutual Shareholders that hold their Old Mutual Shares in uncertificated form within the nominee account or within a CSDP.

Old Mutual Shareholders on the Namibian register, Malawi register, UK register and Zimbabwe register will be paid the local currency at the following rates:

   -     Namibia: 1.0000 Namibian dollars per Rand 
   -     Malawi: 52.7666 Malawian kwacha per Rand 
   -     United Kingdom: 0.0474 Pound sterling per Rand 
   -     Zimbabwe: 6.3251 RTGS dollar per Rand 
   3.   EXAMPLES OF FRACTIONAL ENTITLEMENT

- Example 1: This example assumes that an Old Mutual Shareholder holds 100 Old Mutual Shares at the close of business at the Record Time. The rounding convention described above is then applied and the Old Mutual Shareholder will receive 1 Unbundled Nedbank Share in respect of the 100 Old Mutual Shares held by them as at the Record Time and a cash payment for the fractional entitlement of 0.31954 x ZAR159.48627 = ZAR50.96224.

- Example 2: This example assumes that an Old Mutual Shareholder owns 1,000 Old Mutual Shares at the close of business at the Record Time. The rounding convention described above is then applied and the Old Mutual Shareholder will receive 13 Unbundled Nedbank Shares in respect of the 1,000 Old Mutual Shares held by them as at the Record Time and a cash payment for the fractional entitlement of 0.1954 x ZAR159.48627 = R31.16362.

   4.   TAXATION

Old Mutual Shareholders are further referred to paragraph 6 of the Finalisation Announcement which outlines the tax treatment in respect of the Unbundling. As noted in the Finalisation Announcement, the Old Mutual Board has specifically resolved to distribute the Unbundled Nedbank Shares as a return of capital (paid out of "contributed tax capital"). The distribution of the Nedbank Shares on the Nedbank Unbundling does not qualify as an "unbundling transaction" for purposes of section 46(1) of the Income Tax Act and should be treated as a taxable event for Old Mutual Shareholders who are resident in South Africa. Consequently, the receipt of the Unbundled Nedbank Shares (including the Cash Proceeds) by South African tax resident Old Mutual Shareholders should constitute a "return of capital" for South African tax purposes only. Dividends tax should therefore not apply. The receipt of the Unbundled Nedbank Shares by Old Mutual Shareholders who are non-resident of South Africa should also be treated as a "return of capital" under general South African tax principles.

   5.   NOTICE TO US INVESTORS

Shareholders with a registered address in the United States of America are reminded that the Unbundled Nedbank Shares will only be delivered to Old Mutual Shareholders who are qualified institutional buyers ("QIBs") and who have returned executed investor letters to Old Mutual, with a copy of the relevant CSDP, broker, custodian or nominee in the case of Old Mutual Shareholders that hold their Old Mutual shares in uncertificated form, and the SA Registrar in the case of Old Mutual Shareholders that hold their Old Mutual shares in certificated form, by the Record Time. Old Mutual Shareholders who are QIBs are further referred to paragraph 4.5 of the Finalisation Announcement which outlines the full details in relation to the process and requirements for QIBs for the purpose of the Unbundling.

DISCLAIMER

This announcement is not for distribution, directly or indirectly, in or into the United States (including its territories and possessions, any State of the United States and the District of Columbia), Australia, Canada or Japan. These materials do not constitute or form a part of any offer or solicitation to purchase or subscribe for, or otherwise invest in, securities in the United States, Australia, Canada or Japan. The Unbundled Nedbank Shares mentioned herein have not been, and will not be, registered under the US Securities Act. The Unbundled Nedbank Shares may not be offered or sold in the United States except pursuant to an exemption from or in a transaction not subject to the registration requirements of the US Securities Act. There will be no public offer of securities in the United States.

The information contained in this announcement constitutes factual information as contemplated in section 1(3)(a) of the South African Financial Advisory and Intermediary Services Act, 37 of 2002 (as amended) and should not be construed as an express or implied recommendation, guide or proposal that any particular transaction in respect of the Old Mutual Shares or the Unbundled Nedbank Shares or in relation to the business or future investments of Old Mutual or Nedbank is appropriate to the particular investment objectives, financial situations or needs of a prospective investor, and nothing in this announcement should be construed as constituting the canvassing for, or marketing or advertising of, financial services in South Africa.

No representation or warranty, express or implied, is made by any person other than Old Mutual as to the accuracy, completeness or verification of the information set out in this announcement, and nothing contained in this announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or the future. No person other than Old Mutual assumes responsibility for this announcement's accuracy, completeness or verification and all other persons accordingly disclaim, to the fullest extent permitted by applicable laws and regulations, any and all liability whether arising in delict, tort, contract or otherwise that they might otherwise be found to have in respect of this announcement or any such statement.

Financial Advisor

Merrill Lynch South Africa (Pty) Limited t/a BofA Securities

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