Royal Bafokeng Holdings (RBH), the investment vehicle of the Royal Bafokeng nation, a community of 300,000 Tswana-speaking people in the North West province of South Africa, has approached South African and UK fund manager Old Mutual with a proposal to buy a stake of between 60% and 70% in Mutual & Federal Insurance Company Limited.
The indicative offer price is R27.50 per share, a 5% premium to the 30-day volume weighted average market price of Mutual & Federal shares for the period up to 2 November 2007.
Mutual & Federal, in which Old Mutual has a 75% total stake, provides short term insurance services to the personal, commercial and corporate markets in South Africa, Namibia, Botswana and Zimbabwe.
For the year ended 31 December 2006, Mutual & Federal produced net premiums of R7.4bn (US$1.14bn), with profit before taxation of R1.7bn (US$262m).
RBH has significant capital derived from the leasing of mining rights to platinum mining companies in South Africa and has a stated strategy of diversifying its income stream.