Quilter wants to buy back its shares from South African investors - at a premium

South African investors holding shares in Old Mutual's former UK business, Quilter [JSE:QLT] will be given a chance to sell them at a premium to the market price, as the company plans a so-called odd-lot offer.

The London-based wealth-management business listed on the JSE and the London Stock Exchange in June 2018 as part of Old Mutual's “managed separation”. The company inherited a lot of Old Mutual investors, who were given shares during the separation process. Some 60% of Quilter’s shareholders are based in South Africa.

Quilter CEO Paul Feeney said most of the shareholders holding less than 100 of Quilter’s shares have not performed done any trades since they acquired the shares. These shareholders hold about 50% of Quilter’s issued shares, but less than 1% of the company’s share capital. Quilter is now making an offer to buy their shares at a 5% premium to the market price at the close of Wednesday (R28). 

“They haven’t purchased anything more and they hold less than 100 shares. We are offering them the opportunity to sell us those shares. But they have the right to hold on to those shares if they want to hold on to them,” said Feeney. It also announced on Wednesday that it will be buying shares in the market. 

Quilter also published its financial results for the year ended in December, recording a 3% increase in adjusted profit before tax after the sale of its life insurance business. 

The company received a net surplus of £375 million (R7.8 billion) from the sale of Quilter Life Assurance. This surplus will be used to buy back shares which Feeney said will commence “imminently” on both the London and Johannesburg Stock Exchanges.

The share buyback programme will commence first and the odd-lot offer for minority shareholders is expected to happen towards the end of April, said Feeney. The two processes are expected to reduce Quilter’s share capital and the company plans to cancel the repurchased shares.

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