UPDATE 1-Investec abandons unit stake sale due to market volatility

Published: 2020-03-12 tag: financials

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March 12 (Reuters) - South Africa-based banking group Investec said on Thursday it would not proceed with a 10% stake sale of its asset management business NinetyOne as the coronavirus outbreak in Europe roils stock markets.

The company said it will, however, push ahead with the listing and demerger plans of the asset management business on the London and Johannesburg exchanges on March 16.

Investec will therefore continue to hold a 25% stake, it said in a statement, and will be subject to a 180 day lock-up period.

“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,” the South African lender said in the statement.

Global stocks plunged into a bear market on Thursday after U.S. President Donald Trump banned travel from Europe to stem the spread of coronavirus, threatening disruption to the world economy.

In Britain, the FTSE 250 was down 10% on Thursday, and Investec was 7.7% lower.

“Investors are just too nervous at the moment, it doesn’t make sense to go ahead with a stake sale in these circumstances,” a source familiar with the NinetyOne transaction said on condition of anonymity, adding the wider market for initial public offerings was closed for now. (Reporting by Samantha Machado in Bengaluru and Abhinav Ramnarayan in London; editing by Shinjini Ganguli and Barbara Lewis)

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