The IOOF Holdings Limited (ASX: IFL) share price climbed 1.7% on the ASX yesterday, as the wealth manager announced the sale of its stake in Ord Minnett.
What did IOOF announce about the sale?
IOOF announced the divestment of its 70% holding in Ord Minnett to a consortium of private investors, led by current Ord Minnett management.
Management said that concurrently with the acquisition of IOOF's stake in Ord Minnett, the consortium will also acquire JP Morgan's existing 30% stake in the business to afford them complete ownership and full control going forward.
Completion of the sale is expected to occur on or around 24 September 2019 with sale consideration for IOOF's 70% stake expected to total $115.0 million, resulting in an after-tax profit of around $83 million for the Aussie wealth manager.
As noted in the announcement, it is the intention of the parties that the sales of IOOF's and JP Morgan's respective stakes to the consortium at the same time.
Should this not be possible, IOOF will acquire JP Morgan's 30% stake and it is intended that IOOF will then sell that 30% stake to the consortium, along with its existing 70%.
Ord Minnett has $10.1 billion in funds under administration (FUA) as at 31 May 2019 and 264 licensed advisors, with its contribution to IOOF's underlying net profit after tax for the 11 months to 31 May 2019 coming in at $11.0 million.
What's been happening to the IOOF share price?
IOOF investors endured a difficult 2018 amid the Financial Services Royal Commission, as the IOOF share price more than halved in value to close the year at $5.17 per share.
The stock rebounded earlier in the year on a lighter-than-expected final report from Commissioner Kenneth Hayne, but is currently trading at $5.26 per share.
IOOF is far from the only wealth manager to see its equity struggling in 2019, with fellow big player AMP Limited (ASX: AMP) stock having fallen 42% in the last 12 months after its own Royal Commission hiding.
