UK asset manager River and Mercantile (R&M) has recommended an all-share acquisition bid from AssetCo for £98.8m.
Shareholders in the firm, which runs £44bn in assets under management, will receive AssetCo shares in exchange for their lesser-valued R&M holdings and will make up 41.6% of the combined group’s register.
They will also receive a portion from the separate sale of the solution business, to Schroders for £190m, which was announced in October 2021.
Jonathan Dawson, chairman of River and Mercantile Group, said: “Taking this transaction and the sale of Solutions to Schroders together, we will have delivered total value to shareholders of £289m, or £3.35 per share – a significant premium to the group’s price last summer.”
Shares now stand at £295m, up 32.9% over the past 12 months, jumping 22.5% after the Schroders deal in October and again by 15% when AssetCo made its offer in November.
Shares in AssetCo, who’s chairman Martin Gilbert co-founded Aberdeen Asset Management, currently stand five times higher than R&M at £15.40 per share.
The acquisition will need to be approved by shareholders following a shareholder meeting, but is recommended by the firm. Dawson urged investors to vote in favour of the offer as it “represents good value to shareholders”.
He added: “This confirms the board’s view that the market was undervaluing R&M and validates the steps we have taken to realise value for our investors.”