Schroders (SDR), the FTSE 100 fund management group, has accepted a £9.9bn cash offer from US investment group Nuveen.
Nuveen, the investment management arm of the Teachers Insurance and Annuity Association of America, has agreed to pay 612p per share for Schroders shares comprising of 590p cash plus a 22p dividend. The cash is 29% more than last night’s closing price of 456p but with the dividend the premium rises to 34% and values Schroders at 17 times last year’s operating profit.
Holders of 42% of the shares have given irrevocable undertakings to support the acquisition, which suggests the Schroder family has backed the deal which will create a group with $2.5trn assets under management.
New York based Nuveen, which has $1.4trn under management, said it recognised Schroders’ position as a “pre-eminent financial institution with a deep-rooted history and strong brand recognition”. It said the Schroders brand would be retained and London would serve as the group’s non-US headquarters and largest office, with around 3,100 staff.
Conscious of the political opposition the US takeover could provoke, the companies said: “The combined group expects to deliver significant benefits to the UK as a global financial centre, enabling more long-term capital to be channelled into the economy by deepening the pool of investment capital, while reinforcing London’s role in global asset and wealth management.”
They also raised the possibility of Schroders re-listing in London in the future. “Schroders remains committed to supporting the UK capital markets and, in the event that Nuveen and bidco [the bid vehicle Pantheon] were to consider an initial public offering of Schroders or the combined group in future, Nuveen and bidco would (subject to an appropriate analysis at the time) intend to list on the London Stock Exchange as one of the dual listing venues.”
Nuveen chief executive William Huffman said: “By bringing our complementary platforms, capabilities, distribution networks and cultures together, we will create an extraordinary opportunity to enhance the way we serve our collective clients through access to new markets, bolstered product offerings, and deeper pools of investment talent. This transaction is about unlocking new growth opportunities for wealth and institutional investors around the world by giving our leading, differentiated public-to-private platform a broader global presence.”
Richard Oldfield, who succeeded Peter Harrison as Schroders chief executive in November 2024, said: “The transaction will significantly accelerate our growth plans to create a leading public-to-private platform with enhanced geographic reach and a strengthened balance sheet. Together, we can create an exceptional opportunity to provide clients with a true breadth of high-quality solutions to meet their evolving needs.”
Schroders chair Dame Elizabeth Corley said: “The board of Schroders is confident that this is the right step for our shareholders, clients and people.”
Schroders shares leaped 29% to a four-year high of 589.4p, just below the cash offer.
Finsbury Growth & Income (FGT), the UK equity income investment trust run by Nick Train which had 5.8% in Schroders at 31 January, added 0.8% to 741p.
News of the agreed bid came with Schroders’ annual results which showed profit before tax rose 21% to £673.8m with assets under management up 6% to £823.7bn ($1.1tn).
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