Old Mutual plc was a diversified financial services business, offering insurance, asset management and banking across more than 40 countries in Africa, America and Europe. Until June 2018, it was listed on the London, Johannesburg, Malawian, Namibian and Zimbabwean stock exchanges, employed around 65,000 people and had more than 20 million customers.
In 2016, the new chief executive Bruce Hemphill announced a strategy to break the company up into four businesses, each of which would be separately listed on various global stock exchanges with the plc’s London head office being closed down. After just over two years of work, all four businesses were independently listed and Old Mutual plc delisted from the stock exchanges where it previously traded.
SO THIS IS WHAT WE’RE GONNA DO…
When the new CEO sidles up to you with his ‘big plan’ you normally expect something that’s 90 per cent spin and ten per cent actually doing anything.
Bruce Hemphill, however, was different.
Bruce had come over from South Africa to run Old Mutual, a financial conglomerate that, according to the market, was worth significantly less than the sum of its parts.
And the market – as we all know – is never wrong.
I liked Bruce a lot. As director of communications, you need access to the boss and his door was always open. Even better, he was someone you could go for a pint with, literally. Down to earth, no nonsense, willing to take advice, I liked him from the off.
Only now, there was the small matter of him wanting to put me out of a job.
To be fair, if Bruce’s plan to demerge the group (‘Managed Separation’, or MS, we called it) went ahead, he’d be out of a job too, along with everyone else at plc headquarters in London.
Soon after agreeing the plan and announcing it to the market, a big chart was hung on the wall listing everyone in head office’s proposed leaving dates. It had a sobering effect.
JULY 31, 2018
That’s when I was due out the door. As part of getting our heads around all this, and ensuring we would still work all hours until we closed up shop, human resources sent us on various courses. One of them involved playing with bits of Lego, to try to visualise how we saw the dynamic in the head office.
Another involved spending two days in a hotel room talking to an industrial psychologist to help plan for the next career move.
In March 2016, when the break-up was first announced, it seemed a long way away. The first year or so was relatively low key, with the odd asset sale just about the only thing to show publicly for the vast amount of work going on behind the scenes to get our UK and South African businesses ready for their independence. Work that involved building entirely new functions for each of the businesses, such as treasury departments, investor relations teams, company secretariats, as well as tidying up and strengthening balance sheets.
The media were relatively sanguine – everything was ‘on track’ unless otherwise specified – and the investors, carefully marshalled by my colleague Paddy Bowes, were enthusiastically supportive of the idea that we were going to unlock billions of pounds worth of shareholder value by losing head office costs, setting the underlying businesses free to chart their own course and eliminating the conglomerate discount.
Internal audiences, on the other hand, took a bit more management.
While Bruce was laidback when it came to the media, some of the other board members were rather more concerned with their PR profiles. The fact that this was a detailed and complex task, best done out of the spotlight, didn’t much resonate.
Then there were the factors out of our control which caused the occasional wobble. The company’s auditors were caught up in a corruption scandal in South Africa which led to lots of unwelcome scrutiny and expenditure of management time.
Elsewhere, the head of one of the soon to be listed businesses decided to leave, causing a nervous wait for a replacement. Delays in installing IT systems and the usual uncertainty and gamesmanship associated with asset sales added to the mix.
The difficult macroeconomic situation in both the UK and South Africa, our key markets, didn’t help much either.
The UK’s attempts to leave the European Union, the unpopularity of the Zuma regime amongst international investors (as well as amongst many South Africans) and, of course, the vagaries of the Trump Admistration, were hardly conducive to running a complex global business project.
The situation in South Africa – Old Mutual’s birthplace and home to its largest source of profits – had a particular impact on sentiment although that turned from a negative to a plus, largely speaking, once Cyril Ramaphosa took charge in late 2017. Issues remained, of course – we were still caught up in the ongoing arguments about the use of our auditors, for example – but these proved manageable.
Approaching the second anniversary of the announcement of the break up, we were on the home straight. Our external PR advisers began talking about ‘declaring victory’ which, of course, meant things were about to go south.
No communications director’s career is complete without at least one trip to the Southern District Court of New York, which is where we ended up a couple of days before our planned announcement of the listing of the independent businesses. An ancient, badly-written contract came back to bite us when the counter-party to a long forgotten deal went to court in America on the basis of some highly theroretical claim they might have against Old Mutual in the distant future if certain very unlikely events ever came to pass.
When details of the claim landed on my desk, there was a little bit of buttock-clenching and a lot of rewriting documents. My team pulled a couple of all nighters as we sketched out Plans B and C. Happily, the case was resolved to the satisfaction of all concerned.
I can laugh about it now but, at the time, it was the most serious wobble we’d faced and in sight of the finish line too. In the end, the managed separation was completed, six months ahead of time and on budget, in the first half of 2018.
Most plc staff have left and moved onto new roles and new careers and Old Mutual plc has been delisted from the London and Johannesburg Stock Exchanges, to be replaced by Old Mutual Limited in South Africa, Nedbank in South Africa, Quilter in the UK and Brightsphere Asset Management in the US. I left at the end of July.
Bruce is still around. One day soon, he will switch out the lights and lock up.
Job done, we go onto the next thing.