Mergers and acquisitions  

James Hay targets Nucleus shareholders with new takeover strategy

James Hay targets Nucleus shareholders with new takeover strategy

James Hay is targeting Nucleus shareholders in a new takeover strategy to buy the platform.

The firm is now pursuing a takeover offer, directed at the shareholders. In the original scheme of arrangement format, the target company would have proposed the deal to shareholders.

Nucleus has consented to the switch to a takeover offer. 

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According to James Hay, the tactic “offers greater certainty of execution” as it would be able to push the £145m deal through by passing a lower bar of approval.

Under the original strategy, James Hay had to achieve approval from at least 75 per cent of Nucleus shareholders. This new strategy means the firm only has to gain approval from 50 per cent of all shareholders. 

The board of Nucleus and Sanlam, both in favour of the sale, hold over 50 per cent of the company between them.

Shareholders had been due to vote on the deal today (March 30). But with the new takeover strategy, this meeting has been adjourned and will not be rescheduled.  

The terms of the offer itself remain unchanged. Nucleus shareholders are being offered 188 pence per share they hold in the company.

This represents a premium of 41.89 per cent of Nucleus’s share price on December 1, 2020 (the last business day prior to the commencement of the offer period).

Nucleus directors intend to recommend the shareholders unanimously accept the offer. 

A spokesperson for James Hay said: “We were pleased to note that at the closing of the deadline for registering votes prior to the meeting, 94.93 per cent of the votes that had been submitted in respect of the scheme were in favour and that 44 registered members had voted submitted votes (of which 27 were in favour and 17 were against).  

“The combination of the James Hay and Nucleus businesses represents a compelling opportunity to establish a leading independent adviser platform, with £45bn of AUA, with the scale to invest and deliver real value for advisers.”

James Hay, which appointed a new CEO in September 2020 in the form of Richard Rowney, bid for the platform at the end of last year. 

Nucleus was hit hard during the pandemic and suffered a 46 per cent fall in profits during 2020

James Hay intends to merge the operations of Nucleus into its business to create a financial planning and retirement-focused adviser platform.

It is expected that Nucleus will be shifted from the Bravura technology it currently uses to FNZ. Several Nucleus job losses are also anticipated. 

Jon Yarker is a freelance reporter at FTAdviser