US-headquartered wealth manager Raymond James has agreed to acquire UK rival firm Charles Stanley.
In a London Stock Exchange announcement on 29 July, Raymond James said it will buy the entire issued and to be issued share capital of Charles Stanley, which is calculated at 515 pence per share bringing the total to approximately £279m ($381m, €323m).
The acquisition will add 200 wealth managers based all over the UK and £27.1bn in client assets, bringing Raymond James’ UK client assets to over £40bn.
Under the terms of the deal, shareholders of Charles Stanley will be able to opt from a loan note alternative in lieu of part or all of the cash consideration.
So far, the acquisition has received the backing of 34.5% of shareholding, which includes irrevocable undertakings from:
- The Howard Family – 10,330,864 shares, around 19.8%;
- Charles Stanley directors – 7,648,192 shares, approximately, 14.7%.
Additionally, Sir David Howard and his wife hold interests in certain shares of the UK wealth manager through Queen Street Securities Limited, incorporated in Jersey. Raymond James said that they will enter into an irrevocable undertaking to vote in favour of the M&A deal following its announcement, bringing the total backing to 38.5% of shareholding.
Subject to regulatory approval, the deal is expected to become effective in the last quarter of 2021.
Paul Reilly, chief executive of Raymond James, said: “We have long respected and admired Charles Stanley and believe our proposal presents an extremely attractive opportunity to combine our respective UK wealth management operations.
“Raymond James will seek to leverage the respective strengths of Charles Stanley and Raymond James through further investment in technology, infrastructure and back-office partnerships to enhance the firms’ already strong offering in wealth management.”
Paul Abberley, chief executive of Charles Stanley, added: “The board believes that the terms of the acquisition represent fair value and an attractive premium for Charles Stanley shareholders and therefore intends to recommend unanimously that Shareholders vote in favour of the acquisition.
“Raymond James recognises Charles Stanley’ reputation, heritage and talented staff, as well as our shared client-centric approach and compatible structures and cultures. Supported by the clear strategic rationale and intentions Raymond James has described today, I believe all stakeholders will benefit from the opportunities for growth arising from Charles Stanley becoming embedded within the Raymond James group.”