(Adds details on sale, shares)
Oct 26 (Reuters) - Fund manager River and Mercantile Group
said on Tuesday it would sell its pensions business to
Schroders Plc for 230 million pounds ($316.30 million)
as it focuses on its primary asset management business.
River and Mercantile (R&M) shares surged 20% in morning
trade to a 20-month high of 295 pence on the news. Schroders
shares were up 1%.
The R&M board said it has decided to recommend the Schroders
offer for the Solutions business, which has assets under
management worth 42 billion pounds and serves more than 100
clients, mainly trustees of pension schemes.
R&M said its CEO James Barham would continue to lead the
Solutions business and would also play a broader management role
at Schroders once the deal is completed. He will be succeeded by
Alex Hoctor-Duncan as R&M's boss.
The company said it intends to return the majority of
proceeds to investors, and will consult with shareholders
regarding the amount.
It said it would retain sufficient funds towards planned
development of its faster-growing and more profitable asset
management business.
In July, Schroders, one of Britain's biggest fund managers,
reported a jump in first-half profit and record-high assets
under management of about $978 billion as low interest rate
environment bolstered money managers.
"This acquisition further enhances our ability to meet the
increasingly complex needs of pension fund clients and is
consistent with our growth strategy," Schroders CEO Peter
Harrison said in a separate statement.
($1 = 0.7272 pounds)
(Reporting by Aby Jose Koilparambil in Bengaluru; Editing by
Anil D'Silva, Carolyn Cohn and Jane Merriman)