Martin Gilbert’s AssetCo all-share takeover of River and Mercantile Group confirmed in £99m deal
City veteran Martin Gilbert has confirmed a deal to take control of River and Mercantile Group as he seeks to establish a heavyweight asset management business.
AssetCo, the vehicle headed by Mr Gilbert has struck a deal to buy R&M, subject to shareholder approval. Mr Gilbert currently sits on the board of R&M as deputy chairman.
As part of the deal, R&M shareholders will be entitled to receive 0.073 AssetCo new shares for each R&M shares they hold.
Acquisition: City veteran Martin Gilbert has confirmed a deal to take control of River and Mercantile Group
Based on a closing price of 1,550p per AssetCo share, the acquisition values each R&M share at 114.6p, with the firm’s entire issued and to-be-issued ordinary share capital valued at around £98.8million.
R&M shareholders will own more than 40 per cent of AssetCo shares as a result of the transaction.
Martin Gilbert, chairman of AssetCo, said: ‘The asset and wealth management industry is contending with significant structural shifts, including technological advances, a reorientation of investing and evolving client needs.
‘We are committed to building an agile asset and wealth manager that is fit for purpose in the 21st century. The acquisition of RMG is a core part of this strategy; it strengthens our active equity capability and importantly provides a foundation stone to building a private markets business given its infrastructure investment team.
‘RMG complements our existing presence in thematic investing with Rize ETF and our investment in Parmenion, a digital platform for the financial planning sector.
‘I’m looking forward to continuing to work with RMG team to develop the business, to ensure we continue to meet investors’ needs and to unlock value for RMG Shareholders.’
Jonathan Dawson, chairman of RMG said: ‘The board believes that the offer from AssetCo not only represents good value to shareholders, but provides our clients and colleagues with a powerful investment platform led by a team with deep experience in the asset management industry.
‘The board encourages our shareholders to support this transaction as the board will be doing in respect of their own holdings.
‘Taking this transaction and the sale of Solutions to Schroders together, we will have delivered total value to shareholders of £289million, or £3.35 per share – a significant premium to the group’s undisturbed share price last Summer. This confirms the board’s view that the market was undervaluing RMG and validates the steps we have taken to realise value for our investors.’
AssetCo said in today’s statement: ‘The AssetCo Directors believe there are numerous structural shifts taking place within the asset and wealth management industry, including demographics and the use of technology. These are presenting both challenges and opportunities for incumbent firms.’
AssetCo is a former shell company which Mr Gilbert and several former colleagues from the firm he founded, Aberdeen Asset Management, have used to acquire stakes in a number of businesses in the asset and wealth management spheres, including a stake in the Parmenion platform and Saracen.
Premier Miton also bid for the business in November last year, but pulled out of talks earlier this month.