Wealth manager Ashcourt Rowan has seen its share price jump by almost 54 per cent, following the announcement that Towry Finance has agreed in principle to acquire the firm for a consideration of £97m.
The price represents a 60 per cent “premium” to Ashcourt’s closing price of 168.5 pence on 30 January. According to the stock exchange at the time of writing (8.40am) the share price is currently at 259.16p, a 54 per cent jump on Friday’s close.
Shareholders will receiving 270p in cash plus a principal amount of 5p in loan notes.
According to a statement, the combination will create “a major player” in the UK private wealth market, better able to meet the needs of, and offer a broader range of services to, clients.
Ashcourt Rowan’s directors, advised by Cantor Fitzgerald, consider the terms of the transaction to be “fair and reasonable”, and “unanimously recommend” that shareholders vote in favour of the resolutions relating to the transaction, according to a statement.
Ron Sandler, Towry chairman, said: “Our highly complementary business models will deliver significant client benefits, providing access to a broader range of services and investment solutions.
“Ashcourt Rowan has developed into a high quality business following a period of reorganisation and with a strong cultural fit, the combined entity will be well positioned to take advantage of further growth opportunities as the market continues to evolve.”
Hugh Ward, chairman of Ashcourt Rowan, explained that the executive team worked tirelessly to execute a recovery of Ashcourt Rowan’s position since joining in late 2011, effecting the placing in December that year.
“The offer price of 275p per Ashcourt Rowan share represents a fair price for the business, is a 4.7 times increase in the market capitalisation of the Ashcourt Rowan Group since 1 December 2011 and is testament to the dedication, passion and drive of all our staff.
“I believe that the combined entity will be well placed on completion to benefit from the growth dynamics of the wealth management industry over the coming years and provide an outstanding platform for key professionals in the sector.”
Towry is backed by private equity firm Palamon, while Ashcourt Rowan is owned by a variety of backers, including private equity firms Tetragon Financial Group and The Jodi One Trust, along with fund managers River and Mercantile and Artemis.
Ashcourt Rowan has assets under advice of £5bn - of which £2.3bn are managed on a discretionary basis - and employs 340 members of staff in 16 offices across the UK, while Towry has £6bn in assets under advice, employing around 800 people across 20 offices.
peter.walker@ft.com
Additional reporting by Donia O’Loughlin
