AssetCo takeover of River & Mercantile confirmed

AssetCo takeover of River & Mercantile confirmed

Martin Gilbert's AssetCo has confirmed its takeover of River & Mercantile.

A statement to the London Stock Exchange this afternoon confirmed the long-touted deal will go ahead, with AssetCo paying £98.8m for the company in an all share transaction.

As part of the deal, the cash from the sale of the River & Mercantile Solutions business to Schroders, some £190m, will also go to River and Mercantile shareholders.

AssetCo already has a stake in R&M, whose shareholders will receive 0.73 AssetCo shares for every R&M share they own.

When the return of the cash from the sale of the solutions business is taken into account, the total value of the deal is £289m. 

R&M shareholders will own more than 40 per cent of AssetCo shares as a result of the transaction. 

AssetCo already owns Saracen Fund Managers, and asset management firm which will be combined with R&M. 

In a statement AssetCo said: "It is currently intended that [R&M], together with AssetCo's existing active equities asset manager Saracen will form the foundation for AssetCo's active equities business, leveraging the investment expertise of both businesses to deliver best-in-class strategies and performance to investors."

The intention is also to launch products which invest in unquoted companies, particularly unquoted companies in the ESG universe. AssetCo deputy chairman Peter McKellar previously ran the private markets business at Aberdeen. 

R&M was formed in 2014 and has assets under management of £49bn.

AssetCo is a former shell company which Gilbert and several former colleagues from the firm he founded, Aberdeen Asset Management, have used to buy stakes in a number of businesses in the asset and wealth management sectors, including a stake in the Parmenion platform and Saracen. 

The company's chief executive, Campbell Fleming, is tasked with the day-to-day running of the businesses acquired by AssetCo, while Gilbert and others focus on the M&A.  

When the offer was initially touted in November, AssetCo said its directors believed the two firms were “highly complementary” and a combination of the two would create “significant value” for the group’s clients, portfolio managers, employees and shareholders.

AssetCo, which is chaired by Gilbert, said in March last year it was looking to make “strategic acquisitions” and develop the business through M&A.

In June 2021, the firm collected £30.9m to fund this strategy.

Gilbert is also deputy chairman of R&M but has recused himself from the board while discussions of a takeover take place.

Premier Miton also bid for the business in November last year, but pulled out of discussions earlier this month.

The firm’s chief executive Mike O’Shea said he had concluded there were “insufficient commercial merits” for the deal to go ahead.

Both approaches were conditional on the completed sale of the firm’s solutions business, which was sold to Schroders for £230m in October.