AssetCo acquisition of all shares of River and Mercantile Group confirmed
Full acquisition of River and Mercantile Group by Martin Gilbert’s AssetCo confirmed in £99m deal
City veteran Martin Gilbert has confirmed a deal to take control of River and Mercantile Group as he aims to set up a heavyweight wealth management company.
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 agreement, R&M shareholders are entitled to 0.073 new AssetCo shares for each R&M share they own.
Takeover: City veteran Martin Gilbert has confirmed a deal to take control of River and Mercantile Group
Based on a closing price of 1,550 pence per AssetCo share, the acquisition values each R&M share at 114.6 pence, valuing the entire issued and outstanding common stock of the company at approximately £98.8 million.
R&M shareholders will own more than 40 percent of AssetCo’s shares as a result of the transaction.
Martin Gilbert, Chairman of AssetCo, said: “The wealth and asset management industry is experiencing significant structural shifts, including technological advancements, a reorientation of investing and evolving client needs.
“We are committed to building a flexible wealth and asset manager fit for the purpose of the 21st century. The acquisition of RMG is a core part of this strategy; it strengthens our active capital capacity and above all provides a foundation for building a business in the private market given the 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 industry.
“I look forward to continuing to work with the RMG team to develop the business, ensure we continue to meet investor needs and create value for RMG’s shareholders.”
Jonathan Dawson, Chairman of RMG said: “The board believes that AssetCo’s offer not only represents good value for 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 do with regard to their own interests.
“When we take this transaction and the sale of Solutions to Schroders together, we have delivered a total value of £289 million to shareholders, 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 is undervaluing RMG and confirms the steps we have taken to deliver value to our investors.”
AssetCo said in today’s statement: “The AssetCo directors believe there are numerous structural shifts taking place within the wealth and asset management industry, including demographics and technology use. These present both challenges and opportunities for established companies.’
AssetCo is a former shell company that has used Mr. Gilbert and several former colleagues of the company he founded, Aberdeen Asset Management, to acquire interests in a number of wealth and asset management companies, including a stake in the Parmenion platform and Saracen.
Prime Minister Miton also bid for the company in November last year, but withdrew from negotiations earlier this month.