Gilbert’s AssetCo mulls River and Mercantile bid

Martin Gilbert

Martin Gilbert’s investment firm AssetCo plc is one of two companies that have made preliminary bid approaches for fund manager River and Mercantile Group (RMG), which manages assets of almost £50 billion.

Gilbert’s firm — and rival suitor Premier Miton Group — now have until December 21 to announce a firm intention to make an offer or walk away.

AssetCo chairman Gilbert is the former co-CEO of Standard Life Aberdeen (SLA), now called abrdn.

Gilbert is also deputy chairman of River & Mercantile — but AssetCo said he has “recused himself from the RMG board for the purposes of discussions in relation to the possible offer.”

Gilbert’s AssetCo plc has a 5.85% stake in River and Mercantile Group — while abrdn owns a 7.6% shareholding.

River and Mercantile shares rose about 12% to around £3.20 to give it a stock market value of about £270 million.

AssetCo said: “The board of AssetCo plc notes the announcement by RMG regarding a possible offer from AssetCo and confirms that it has submitted an indicative non-binding securities exchange proposal for the entire issued and to be issued share capital of RMG that is not already owned by AssetCo to the board of RMG.

The possible offer is made for the remaining RMG asset management business post the sale of RMG’s Solutions business, and any offer made would be conditional on the completion of the sale of the solutions business.

The AssetCo directors believe that RMG Asset Management and AssetCo are highly complementary and that a combination of AssetCo and RMG Asset Management would create significant value for the combined group’s clients, portfolio managers, employees and shareholders.

“The AssetCo directors also believe that there is material value in leveraging other elements of the AssetCo business and strategy to increase the value of RMG Asset Management and widen investor appeal.

Whilst negotiations between RMG and AssetCo regarding the structure of a potential deal are continuing, the indicative non-binding proposal to the board of RMG may lead to a requirement for a reverse takeover pursuant to Rule 14 of the AIM Rules.

There can be no certainty that the possible offer or any offer will ultimately be made, nor as to the terms of any such offer …

AssetCo currently holds 5 million RMG shares representing approximately 5.85 per cent. of its voting rights.

Martin Gilbert, chairman of AssetCo and deputy chairman of RMG, has recused himself from the RMG board for the purposes of discussions in relation to the possible offer.”

River and Mercantile said: “The board of River and Mercantile notes the recent media speculation and confirms that it has received preliminary approaches from AssetCo PLC and Premier Miton Group PLC regarding possible offers for the company.

The approaches from AssetCo and Premier Miton relate to possible offers for the company.

“However, each of AssetCo and Premier Miton has stated to the board that any possible offer would be conditional on the completion of the proposed sale of the Solutions business, as announced by the company on 26 October 2021, prior to the completion of any possible offer for the company.

“The board of River and Mercantile reaffirms unanimously that the sale continues to be recommended to shareholders.

There can be no certainty that any offer will be made by either of AssetCo or Premier Miton, nor as to the terms on which any such offer might be made.

In accordance with Rule 2.6(a) of the Code, each of AssetCo and Premier Miton is required, by not later than 5.00 p.m. on 21 December 2021 (being 28 days after today’s date) to either announce a firm intention to make an offer for River and Mercantile in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer for River and Mercantile, in which case the announcement will be treated, for the relevant possible offeror, as a statement to which Rule 2.8 of the Code applies.

“This deadline can be extended with the consent of the Takeover Panel in accordance with Rule 2.6(c) of the Code.”

Premier Miton said: “Premier Miton Group plc notes the recent media speculation in relation to River and Mercantile Group PLC and confirms that it has approached the board of River and Mercantile to explore potentially acquiring the entire issued and to be issued share capital of River and Mercantile through the issue of shares.

“Any combination with River and Mercantile would be conditional on, inter alia, the successful completion of the proposed sale of its Solutions business to Schroders and the subsequent distribution of the net cash proceeds to River and Mercantile’s shareholders.

“Premier Miton is an established, well-capitalised and profitable fund management operation, with a strong balance sheet and attractive dividend policy.

“Premier Miton believes the scale and synergy benefits arising from a combination with River and Mercantile would drive value accretion for both sets of shareholders.

“Premier Miton’s management team is experienced in assessing and executing strategic opportunities and has recent and relevant integration experience following its own successful merger of Premier Asset Management Group and Miton Group in 2019.

“Premier Miton has been assessing the merits of a combination with River and Mercantile for a period of time and believes the scale and cultural alignment between the respective businesses would deliver a balanced and resilient business across a diversified product offering, enabling employees of the combined businesses to maximise their potential.

“This announcement does not amount to a firm intention to make an offer under Rule 2.7 of the Code and there can be no certainty that any transaction will ultimately be forthcoming.

“Premier Miton looks forward to continuing its positive engagement with the River and Mercantile board.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.