Advent International and Bain Capital, the payout firms behind the recent float of Worldpay (LON:WPG), are among the companies weighing bids for Old Mutual’s (LON:OML) wealth management business, The Sunday Times has revealed. The news comes after the blue-chip financial services group unveiled plans to separate its underlying businesses.
Old Mutual’s share price shed 1.89 percent to close at 191.90p in London on Thursday, largely in line with losses in the broader London market. The shares have lost 17.75 percent of their value over the past year, but are up 7.27 percent in the year-to-date.
The Sunday Times reported yesterday that some of America’s biggest buyout funds were preparing bids for Old Mutual’s £4.5 billion wealth management arm. City sources told the newspaper that Bain and Advent were considering joining forces to make a move on the unit, while Cinven and Warburg Pincus are said to have already made a joint pre-emptive offer for the wealth division.
The newspaper quoted sources with knowledge of the matter as explaining that Old Mutual’s wealth business was the most attractive to private equity firms. While the FTSE 100 group will reportedly consider bids for the unit before 2018 should a “knockout offer” come along, the division could also be spun off in a float.
The news comes after Old Mutual said earlier this month that the company will be split subject to regulatory and government approval. The break-up will also see Old Mutual Emerging Markets, OM Asset Management and Nedbank become standalone businesses.
Analysts meanwhile remain mostly positive on Old Mutual, with Barclays reiterating its ‘overweight’ stance on the group last week, with a price target of 220p. Goldman Sachs, which has a ‘neutral’ rating on the FTSE 100 group, hiked its valuation on the stock from 200p to 208p.