Standard Life Aberdeen
Ahead of its annual general meeting on Tuesday 29 May, Standard Life Aberdeen (SLA) released an update regarding the proposed sale of Standard Life Assurance to Phoenix Group.
Subject to shareholder and regulatory approval, capital worth £1.75bn will be returned to SLA shareholders, comprising £1bn to be returned to shareholders through a B share scheme and £750m to be returned by way of a share buyback programme.
According to the SLA board, it expects there will be capital within the group as a result of the sale and anticipated lower capital requirements.
“SLA has therefore considered the potential for a substantial return of capital to shareholders following completion,” an SLA spokesperson said.
B shares and buy back
SLA said the B share scheme would work by issuing shares to customers which they could then redeem for cash.
“To maintain comparability between the market price per SLA ordinary share before and after the implementation of the B share scheme, it is proposed that the B share scheme will be accompanied by a share consolidation,” the spokesperson said.
It is proposed the remaining £750m would be returned by way of a share buyback.
This programme will involve the on-market purchase of SLA shares and will commence after the completion of the B share scheme.
Further, SLA said the balance of proceeds from the proposed transaction, combined with existing liquidity within the SLA Group, will be used to retire a proportion of SLA’s outstanding debt of £1.9bn and support investment and other general corporate purposes.
Old Mutual
Old Mutual said on Tuesday it will proceed with the listing of its asset management business Quilter as part of its managed separation plans.
The announcement follows Old Mutual shareholders overwhelmingly voting on 25 May in favour of both the demerger of Quilter from Old Mutual and its listing on the London Stock Exchange and the Johannesburg Stock Exchange.
The listing will see Old Mutual offer up to 9.6% of the ordinary shares of Quilter.
Old Mutual said further details, including the total number of shares to be issued, will be released on 11 June.
Further, the final offer price and how many shares will be sold will be announced on or around 25 June.
Rothschild is acting as financial adviser to Old Mutual on its managed separation including the global offer.
Andrew Hopper says:
It’s absolutely staggering that Standard Life believe that off loading all their pension and life book to Pheonix won’t damage their brand…?! It’s either breath taking naivety, or rank incompetence, the damage to the SL brand is catastrophic…and total. They’ve fired a load of .30 calibre ammunition right through their hitherto strong presence and quality reputation. Credibility – shot.
The reasons given in the webinar they put on to deal with questions and concerns were weak and unconvincing. It’s due to take up to 4 years for the whole book to be transferred over – it’s that big. In that time, there’ll be a steady march of GPP and PPP out the door to more trusted providers.