LONDON (Alliance News) - Fund manager Miton Group PLC Friday said it is to sell its Liverpool fund management business to Seneca Investment Managers Ltd, in a deal that could be valued at up to GBP6.4 million.
The sale of Miton's Liverpool fund management business, Miton Capital Partners Ltd, is subject to approval by the UK financial regulator, the Financial Conduct Authority, and is expected to complete by the early part of the second quarter.
Seneca, which Miton said made an unsolicited approach for the business, will pay GBP3.5 million upon completion of the sale, with about GBP1.9 million to follow to take into account the business's net assets.
Two further installments of up to GBP1.0 million will be paid on the first and second anniversaries of the sale, subject to assets under management remaining at or above GBP300 million two years after the deal's completion.
Miton said the decision to sell was motivated by its opinion that the prospects of rapid growth in Miton Capital Partners' assets under management were lower than for the rest of the business. The proceeds of the sale will be used to reduce its regulatory capital requirements and to fund growth.
"Miton's funds under management, excluding the Liverpool business, have almost doubled in the last two years. The accelerating momentum in the group gives the board greater confidence for improved results in the current year," Executive Chairm Ian Dighé said in a statement.
Meanwhile, Midas Income & Growth Investment Trust PLC, whose investment manager is Miton Capital Partners, said Seneca has assured it that multi-asset mandates will be a "core competence" of its enlarged investment management business and that it will continue to be managed by its existing team of fund managers.
In a separate statement, Miton gave a trading update ahead of its final results for the year ended December 31, 2013, saying the assets it manages have almost doubled, moving to GBP3.1 billion from the GBP1.8 billion reported at the end of the previous financial year.
"Although assets under management may initially be reduced by the proposed disposal (GBP450 million as at December 31), the accelerating momentum gives greater confidence in improved results in the current year," the company said in a statement.
The company said it expects adjusted pretax profit, which excludes amortisation, exceptional items and taxation, to be in line with market expectations, which it reported as GBP4.5 million.
Miton Group said it expects to announce final results for the year ended December 31, 2013 on March 24.
Miton Group shares were Friday quoted at 48.50 pence, down 0.75 pence, or 1.5%. Midas Income and Growth Trust shares were down 0.6% to 134.51p.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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