Martin Gilbert battles rival in effort to take over River and Mercantile
Takeover offers push London asset manager’s shares up 12% as bidding war appears likely
Martin Gilbert is battling a rival suitor for the London-listed asset manager River and Mercantile as he attempts to create a new competitor in the UK’s investment industry.
The veteran dealmaker has submitted a bid for River and Mercantile, which has also received an offer from Premier Miton, a rival fund house led by chief executive Mike O’Shea.
A bidding war now appears likely with River and Mercantile’s shares surging 12 per cent higher during morning trading in London on Tuesday.
The rival bidders have until December 21 to confirm their takeover offers. Neither has disclosed any pricing details of the bids they have already made.
AssetCo, the Aim-listed acquisition vehicle chaired by Gilbert, at present owns 5.85 per cent of River and Mercantile, while Premier Miton holds a 5 per cent stake.
Gilbert is one of the UK investment industry’s most prolific dealmakers. He founded Aberdeen Asset Management in 1983 and after multiple acquisitions then helped to engineer its merger with Standard Life in 2017 to create the company now known as Abrdn.
Gilbert is deputy chair of River and Mercantile but has recused himself from the company’s board while discussions about a deal take place.
Earlier this year, AssetCo acquired Saracen Fund Managers, the Scottish asset management boutique, and it also holds stakes in Rize ETF and Parmenion, an advisory business previously owned by Abrdn.
Peel Hunt, the broker, said Premier Miton needed to scale up to achieve its financial potential and was likely to be able to extract larger cost synergies from any deal with River and Mercantile.
Peel Hunt added: “AssetCo is keen to scale up, has an existing platform (through its Saracen business) and might be able to part fund any deal in cash.”
An analyst who declined to be named said the board of River and Mercantile faced a “real dilemma” in evaluating the takeover offers, which were both likely to be a mixture of cash and shares.
“There is significant uncertainty attached to the valuation of AssetCo’s shares, which trade at a very wide discount . . . This could affect the structure and value of the AssetCo offer.”
Both approaches are conditional on the completion of the sale of River and Mercantile’s solutions business to Schroders for £230m in a deal that was agreed last month. The completion of that deal would leave R&M with assets of about £5.6bn.
Mike O’Shea has served as the chief executive of Premier Miton since November 2019 following the merger of Premier Asset Management and Miton. O’Shea joined Premier in 1986 and rose to become chief in 2005.
Premier Miton’s share price dipped 0.9 per cent during morning trading in London while shares in AssetCo were unchanged.