News and Press
| Date: | 30 March 2010 |
| Title: | Investec moves to secure control of Rensburg |
| Author: | Lina Saigol, Kate Burgess and Philip Stafford |
| Download: | pdf version |
For Immediate Release
Investec moves to secure control of Rensburg
Consolidation in the fund management industry stepped up a notch on Tuesday
as Investec agreed an offer to take full control of smaller rival Rensburg
Sheppards, in a deal which values the equity of the latter at £412m.
South African-based Investec, which is listed in London and Johannesburg,
will offer 1.63 new shares for every Rensburg share in a deal which values
Rensburg shares at 916p, a 48 per cent premium to Monday’s closing price
of 620p a share. The investment bank already owns 48 per cent of Rensburg.
Investec’s offer comes five years after it first took its stake in the
private client broker, whose roots go back to the Liverpool Stock Exchange
in 1873.
“Rensburg Sheppards has been a good investment for Investec over the past
few years and the proposal we have announced today is the natural next
step for both businesses,” said Stephen Koseff, chief executive of Investec.
Rensburg acquired Carr Sheppards Crosthwaite from Investec in 2005. In
return, Investec took a 47.7 per cent stake in the newly formed Rensburg
Sheppards. Employees hold a little over 5 per cent of the group.
The deal underlines Investec’s ambition to expand its non-lending revenue
stream and the bank could eventually use Rensburg Sheppards as a platform
from which to build a bigger wealth and asset management business.
Investec’s assets under management rose 50 per cent to £43.4bn in 2009,
while net fund inflows exceeded £4.5bn.
The bank said earlier this month that its British, European and Australian
businesses were expected to post a rise in full-year operating profits,
while profit at its South African unit was expected to fall as defaults
continued to rise.
Investec moved into the FTSE 100 last week. Since floating in the UK in
2002, the group’s shares have risen more than threefold in value.
Funds under management at Rensburg rose by a modest 1.5 per cent between
the end of last September and the turn of the year, to £12.3bn.
Schroders Investment Management and BlackRock Investment Management, which
hold stakes of 7.7 per cent and 2.9 per cent respectively, have signed
letters of intent backing the deal. The deal is intended to be implemented
via a scheme of arrangement.
Goldman Sachs advised Investec while Merrill Lynch acted as corporate
broker. Fenchurch Advisory Partners
was adviser and Numis Securities was corporate broker to Rensburg Sheppards.
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