(Alliance News) - River & Mercantile Group PLC on Tuesday agreed to a GBP98.8 million takeover from AssetCo PLC.
Under the terms of the deal, River & Mercantile shareholders will receive 0.07392 new AssetCo shares. Based on AssetCo's 1,550.0 pence closing price on Monday, the deal values River & Mercantile at GBP98.8 million.
AssetCo has circled River & Mercantile for a number of months. In November, both AssetCo and fellow London listing Premier Miton Group PLC confirmed they initiated discussions with River & Mercantile. Earlier in January, Premier Miton decided against bidding for the asset manager.
AssetCo's buy is contingent on River & Mercantile successfully selling its solutions business to Schroders PLC. A deal for the division was announced back in October, with Schroders set to pay GBP230 million.
As part of the deal, some of the proceeds from the solutions unit sale will be distributed to River & Mercantile shareholders. The shareholder distribution and the AssetCo deal value River & Mercantile at GBP289 million.
River & Mercantile shares were 0.8% lower at 293.50p each in London on Tuesday afternoon, giving it a market capitalisation of GBP250.8 million. AssetCo shares were 0.7% lower at 1,540.00p, valuing the company at GBP129.7 million.
"The AssetCo board believes that there is a strong strategic and financial rationale for the Acquisition and that a combined RMG/AssetCo business is consistent with AssetCo's strategy to be market leading in its chosen best-in-class investment strategies," AssetCo said.
River & Mercantile's directors backed the deal.
The acquisition will count as a reverse takeover.
Also on Thursday, River & Mercantile said its assets under management rose 4.9% to GBP49.94 billion on December 31, from GBP47.61 billion.
Net flows amounted to GBP1.33 billion, while its investment performance added GBP1.01 billion.
By Eric Cunha; ericcunha@alliancenews.com
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Schroders (SDR)
Assetco (ASTO)
Premier Miton (PMI)