Rathbone Brothers To Buy Private Client Funds From Lloyds Banking

Rathbone Brothers PLC (RAT.LN), the independent provider of investment and wealth management services for private investors, charities and trustees, said Tuesday it has agreed to buy certain private client funds from Lloyds Banking Group PLC (LLOY.LN), and entered into exclusive distribution agreement with the U.K. bank.

MAIN FACTS:

-Acquired funds represent up to GBP1.27 billion as at Aug. 31.

-Lloyds and Rathbones have entered into an exclusive distribution agreement whereby Lloyds TSB and Bank of Scotland Private Banking clients with investable assets of up to GBP2 million, who require significant assets in direct investments within a discretionary investment management portfolio service, will be referred to Rathbones.

-Rathbones will pay 3.4% for the LTPB Funds at a market valuation date of Aug. 31, adjusted for cash and asset flows at certain agreed transfer dates.

-The Bank of Scotland Portfolio Management Service's portfolio of clients, or PMS Funds, which, as at Aug. 31, accounted for GBP775 million of FUM and 4,000 clients.

-Rathbones will pay 2.4% of FUM to LBG for the PMS Funds based on the value of FUM when they sign up to Rathbones' service.

-Should all of the Acquired Funds, valued as at Aug. 31, 2009, transfer to Rathbones on Rathbones' own terms of business, the total cost to Rathbones will be GBP35.4 million.

-The acquisition is expected to be earnings enhancing in 2011.

 
-By London Bureau, Dow Jones Newswires; Contact Ian Walker; [phone]; [e-mail]