Currently, Old Mutual owns about 73.5 percent of Mutual & Federal, and has said it offered to buy out all ordinary shares in M&F at 21.25 rand each. "Our increased ownership will enhance our ability to improve M&F's operational performance," Old Mutual group chief executive Julian Roberts said in an interview with Reuters.
Old Mutual shares were down 0.54 percent at 12.95 rand, M&F shares rose 14.37 percent to 20.30 rand, outperforming the JSE All-share index.
M&F said its board has convened a sub-committee of independent directors to consider the offer.
London-listed Old Mutual scrapped the sale of its 77 percent stake in M&F in November after deteriorating economic conditions prompted potential buyers to walk away.M&F was also hit by retrenchment costs during 2008, when it cut around 600 jobs.
Old Mutual, with a diverse range of businesses in South Africa, the U.S., Europe and Scandinavia, has undergone a period of change since the departure of its former chief executive, Jim Sutcliffe, who stepped down in September. It announced further management change, with the appointment of Patrick O'Sullivan as chairman, a former finance director at Zurich Financial Services, replacing Chris Collins who will retire at the end of the year.
Source: Reuters