The chief executive of investment company City of London Group (COLG) said that the firm “will continue to develop its financial services business” after acquiring West Midlands-based Acorn to Oaks Financial Services.
The financial terms of the deal were finalised at an initial consideration of £1.4m ($1.79m, €1.56m).
Michael Goldstein, chief executive of COLG, told International Adviser: “The deal complements our existing group businesses of Credit Asset Management and Recognise Financial Services.
“The group is making steady progress in its application for a UK-banking licence via its Recognise subsidiary, while developing its existing businesses in financial services.
“We will continue to monitor the market for opportunities that support this strategy”.
City of London Group is the parent company of a group of businesses focused on serving the UK SME market. It is listed on the Alternative Investment Market (Aim).
Consideration
Following a previous agreement, the consideration will be made up of a combination of new shares in City of London Group and zero-coupon loan notes that can be converted into new shares in the company later, COLG said.
Acorn to Oaks founders Jason and Claire Oakley, who control 92% of the shares in the financial planning firm, will receive zero-coupon loan notes that can be converted into new City of London shares following the preparation of the annual accounts for the financial year-ending 31 March 2021.
Zero-coupon loan notes are loan notes on which no interest is payable. The principal and the interest are paid at the maturity date.
Other shareholders
The consideration payable to the other Acorn to Oaks shareholders “will be satisfied” by way of new shares in City of London Group.
COLG, following completion of the acquisition, has issued 82,068 new ordinary shares of 2p each.
It will also make an application to the London Stock Exchange for the new ordinary shares to be admitted to trading on the Aim, which is expected to occur on 14 January 2019.
