Written by Citywire

March, 2020

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Investec scraps IPO sale of Ninety One stock in turmoil

Investec has decided against selling a 10% stake in its funds division Ninety One as part of its planned listing of the business next week. 

Investec emphasised that the planned listing on the London Stock Exchange remained on track for 16 March, but it would cancel an earlier minority disposal. 

Investec’s announcement comes as global markets crumbled on the rapid coronavirus outbreak across the world. 

By 2.50pm the FTSE 100 had plunged 9.4% as US stock markets digested US president Donald Trump’s late-Wednesday decision to ban travel from continental Europe for a month as the country attempts to contain coronavirus. 

US stock markets had earlier plunged 7% at the opening bell, triggering a 15-minute suspension of trading and sending the market back into bear territory.

Investec highlighted it had received strong interest in the 10% stake before the challenging market conditions took hold. 

Joint Investec chief executive Fani Titi said: ‘Market conditions have proved particularly challenging in the recent two weeks and, while we were encouraged by the strength and quality of investor engagement in relation to the global offer, we have decided to retain our shareholding in Ninety One.’

He added: ‘[Importantly] the financial benefits of the demerger remain. Ninety One is an excellent company, with an exceptional management team, and we have great confidence in its prospects as an independently-listed firm.’ 

Following the decision, Investec will retain approximately a 25% stake in Ninety One when it lists next week. The entire holding is subject to a 180 day lock-in period.

Ninety One CEO Hendrik Du Toit (pictured) said the demerger remained on schedule.

‘Despite the recent market dislocation, we have been encouraged by the support from our shareholders and potential investors,’ Du Toit said. ‘We are confident in the resilience of our capital-light business model and its organically developed, specialist, active investment offerings.’ 

He added: ‘Ours is a long-term story of a unique business with a carefully-developed culture, a commitment to employee ownership and a long track record.’ 

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