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Quilter mulls sale of heritage life assurance business

The company is undertaking a strategic review of Old Mutual Wealth Life Assurance
investments
Quilter was spun out of Old Mutual and relisted on the FTSE 250 last year

Wealth manager Quilter PLC (LON:QLT) is considering a possible sale of its heritage life assurance business.

The company said it is undertaking a strategic review of Old Mutual Wealth Life Assurance Ltd, which could lead to a disposal.

"No decision has been taken by the board of Quilter PLC on any particular option, including whether to effect a disposal of Old Mutual Wealth Life Assurance," it said in a Thursday statement.

"Accordingly, there can be no certainty that any transaction will be concluded, or if so, its timing or terms."

Quilter was previously known as Old Mutual Wealth Management before it was spun out of South African parent Old Mutual in 2018 as part of a planned separation of the group.

The business was rebranded and relisted on the FTSE 250.

In morning trading, shares in Quilter rose 1% to 146p. 

Disposal raises prospect of special dividend, says UBS 

UBS kept a 'buy' rating on the stock with a target price of 185p.

"While the company has also indicated that no decision has been taken by its board on any particular option, we believe investors will react positively to this announcement as it indicates management willingness to consider selling the business at the right price," the investment bank said. 

"We believe that this business is not core to Quilter’s strategy and that a sale of this business would improve the investor appetite for the stock as this would create a more focused vertically integrated wealth management business."

If the businesss is sold, UBS thinks the growth profile of the group could be "materially enhanced".

UBS noted that Quilter does not need the extra capital and believes the strategic review may increase the prospect of potential proceeds to be returned to shareholders via a special dividend.

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