A number of large US firms have been preparing bids for Old Mutual's £4.5bn wealth management arm, with two buyout funds already placing a joint offer, according to reports.
Following the confirmation in early March that the South African group was planning a "managed separation" of its business to cut costs, some of America's biggest buyout funds have been considering an offer, while The Sunday Times has reported Cinven and Warburg Pincus have already made a joint pre-emptive offer for the wealth division.
Old Mutual appoints head of managed separation
Old Mutual said it would split up its four main businesses (Old Mutual Emerging Markets, Old Mutual Wealth, Nedbank Group and OM Asset Management) in the US, following a strategic review and this would likely "involve equity market activity" for Old Mutual Wealth and Old Mutual Emerging Markets.
Old Mutual Wealth, which is run by chief executive Paul Feeney, includes the investment manager Quilter Cheviot, adviser network Intrinsic and asset managers Old Mutual Global Investors, led by chief executive Richard Buxton.
Other US names reported to be considering an offer are Advent International, Bain Capital and Carlyle. Bain and Advent were responsible for the £6bn float of Worldpay on the FTSE 100 last year.
The split is expected to save about £80m in costs and completed by 2018. According to The Sunday Times sources, Old Mutual would consider bids for the UK wealth arm before this date if they received a "knockout offer".
Meanwhile, Feeney told The Telegraph that Old Mutual Wealth could be a FTSE 100 firm in its own right following the split.
"We have built a business here and now that is probably a FTSE 100 company in its own right, if it went down that route. I am not saying it will go down that route, I am just saying if it were," he told the paper.
