National adviser AFH Financial Group has received an increased acquisition offer from a US private equity firm, after a previous bid failed to win over shareholders.
A previous offer had been made in January, at a price of £225m, but the improved deal is now worth £231.6m.
The offer from Cortina Bidco, a newly incorporated company indirectly controlled by US private equity firm Flexpoint Ford, values each share at 480 pence.
The deal requires 75 per cent backing from shareholders but yesterday, a court meeting and the general meeting, where directors were hopeful that shareholders would pass the necessary motions, were both adjourned indefinitely.
Independent directors of AFH confirmed in a statement to shareholders that they intended unanimously to recommend that AFH shareholders vote in favour of the new deal at both the court meeting and the resolutions at the general meeting.
AFH, which has funds under management of £6.2bn, is currently listed on the London Stock Exchange's Aim.
In annual results published earlier this year AFH said it was on the hunt for valuable buying opportunities in 2021, having pulled out of the acquisition market for much of 2020 due to the coronavirus pandemic.
Speaking at the time of the initial offer, John Wheatley, chairman of AFH, said Flexpoint and Bidco would be "excellent partners" and the acquisition was "in the best interests of all stakeholders of the group".
AFH, which floated in 2014, said its access to both equity capital and debt funding for "growth on reasonable terms and in a timely manner" had faced challenges in recent years.
It said this had slowed the company's growth "meaningfully relative to those privately-owned competitors which have been able to scale their businesses, both organically and through M&A, at a faster pace".
AFH said its independent directors believed the deal, which is subject to regulatory approval, was the "most attractive route for AFH to regain its growth trajectory".
Executive directors at the advice firm have agreed to stay on in their current roles following completion of the acquisition.
In January, Steven Begleiter, managing director of Flexpoint, said: "We believe that the UK wealth management market is currently undergoing an important transition, as regulatory and demographic trends are driving increasing demand for high quality financial advice that can be met by IFA firms with a long-term and client-centric view.
"In addition, the market is highly fragmented, which provides an opportunity to service customers better and create value through consolidation."
Tom Higgins is a freelance writer for FTAdviser
