River And Mercantile Share Discussion Threads

[topvest] 21/5/2022 18:06

I think the base cost for the B share issue is 220p / 220p + the share price on day 1 after B shares. So, it should be 220/c320p but based on current prices could be 220p/265p so more base cost against the Solutions business. Probably makes sense actually as the Assetco bit is no longer worth £100m..Probably £50-60m.

[velocytongo] 21/5/2022 05:39

I'd not given the issue much thought. I think you are saying that the CGT liability should be calculated on your 265p investment? In other words, approx 330p on 265p, as per your earlier post. I'd agree with you and am happy to make the case to the HMRC. In any event, I suspect that I will have losses this year that I can use!

[topvest] 20/5/2022 20:17

On the base cost CGT calculation, I think we are likely to get more of the base cost allocated to the Solutions business - so 220/265 rather than something like 220/320. So that means the tax liability will be lower than expected on the B share redemption? The base cost of the Assetco shares will be half that originally envisaged assuming the share price goes to 45p post record date. Do you agree?

[topvest] 20/5/2022 20:00

Its a very odd situation, that's for sure. I am inclined to just take the Assetco shares that come my way, but I wouldn't be surprised to see the Assetco share price come under some pressure.

[velocytongo] 20/5/2022 13:59

I don't think you are missing anything and my calculations are similar. I did try to get short on Assetco shares (via IG) to try and lock in the profit but there are none on borrow.

As an unhedged position, Assetco shares have to more than half before you lose money, which is a possibility, but defo worth a position.

Just a shame one can't short Assetco to get the arbitrage. Most merge arbs heavily leverage the trade to get the returns but in this case, you'd be looking at an unleveraged 120% with very little deal risk (now that the transaction has been approved by the FCA). I guess that's why the potential upside is 120% !!

[topvest] 19/5/2022 12:24

Given the share price is only c260p that's putting 40p ish on the remaining business versus 110.5p at 1495p Assetco shares.

At 1335p its 99p.

So, certainly interesting now - you get Assetco shares at less than half price if you buy in now. Odd.

Am I missing something? I suppose Assetco shares may be under some selling pressure when the deal goes through & given the way net outflows and markets have gone since the deal was struck, I suspect that Assetco has over paid for the remaining business. But they have overpaid with overpriced equity in my view.

[topvest] 19/5/2022 12:17

Apologies - my mistake; 220p equating to £190m return.

[velocytongo] 19/5/2022 10:31

i thought it was 220p per share? has something changed.
cheers
vt

[topvest] 19/5/2022 10:24

FCA approval today. In a sea of red today, two big positives - have a good size holding here and the Homeserve bid was a 5-bagger. Brewin Dolphin also going through. I guess we will be getting the 190p cash and Assetco shares here, early June sometime?

[topvest] 08/3/2022 20:13

Yes, £190m back as a B share scheme approved on c12 April (subject to regulator approval) and then also the Assetco shares in Q2 sometime.

The share price doesn't make sense.

The B share return is 220p/share.

The Assetco shares are worth 110p/share at the existing Assetco price.

That's 330p/share versus 267p.

Maybe there is an assumption that the Assetco share price may get hammered post deal, but there's still a wide arbitrage play here between 267p now and up to 330p later!

Overall, they have delivered shareholder value, but they have self-harmed the equity asset management business with all the uncertainty. It doesn't look a great deal now from Assetco's perspective given c£1bn of outflows, Dan Hanbury walking and equity markets tanking!

[speedsgh] 15/2/2022 18:52

And more on the new hire...

River & Mercantile hires veteran former Schroders manager -

River and Mercantile has appointed Matt Hudson (pictured) as its lead manager of the ES River and Mercantile UK Equity Income fund as a replacement for Dan Hanbury, who resigned last week.

Hudson previously worked at Schroders, where he spent seven years as a fund manager and head of business cycle. He joined the firm via its acquisition of Cazenove Capital, where he was director of Pan-European equities.

Hudson will work alongside Anna Pugh, who has worked on the fund for four years, sitting in Hugh Sergeant’s value-orientated equity team.

River and Mercantile chief executive Alex Hoctor-Duncan said: ‘I am pleased to welcome someone of Matt’s calibre to the team.’

Hoctor-Duncan replaced James Barham, who moved to Schroders last October as part of its purchase of R&M’s £43bn solutions business.

His appointment followed Martin Gilbert’s consolidation vehicle AssetCo agreeing to a near-£100m all-share purchase of R&M and its £4.2bn of client assets at the end of January.

Hudson left Schroders in early 2020 after being replaced as manager of its UK Opportunities strategy, following a tricky period for the once multi-billion-pound fund that had since dwindled in size.

Over the five years to his exit, the fund returned 24.9%, placing it in the bottom quartile of the Investment Association’s UK All Companies sector. The FTSE All-Share was up 48.3% over the same period.

He also ran the Schroder UK Alpha Income and Cazenove Charity Equity Income funds.

[speedsgh] 15/2/2022 18:51

Oops...

Notification of loss of client mandate -

The Company announces that it has received notice from a client of its equities asset management business of the client's intention to redeem approximately £927 million of assets managed by the Company across several global equity strategies. The assets to be redeemed represent annualised revenue to the Company of approximately £2.8 million.

Group Chief Executive, Alex Hoctor-Duncan commented:

"We are an organization focused on moving forward, delivering high quality active equities and infrastructure fund management to our clients. Losing a client is disappointing, but we are gearing up for several fund launches and will welcome Matt Hudson to run our UK income fund at the end of this month. The motivation of the team is apparent, especially now that we are a specialist equities and real assets focused business post the Solutions sale."

[topvest] 08/2/2022 12:35

Yes, quite disappointing news. They obviously haven't yet found a solution for the UK equity income fund. They need to be attracting new managers, not losing some of the best members of the team! All this uncertainty over the last year has maybe taken its toll. Oh well, I am still positive as I think post-transaction Martin Gilbert will attract the right people.

[speedsgh] 08/2/2022 07:32

Notice of resignation of portfolio manager -

The Company announces that portfolio manager Dan Hanbury has notified its subsidiary, River and Mercantile Asset Management LLP ("RAMAM"), of his intention to resign as partner and portfolio manager.

Dan Hanbury is the portfolio manager of the ES River and Mercantile UK Equity Smaller Companies Fund (the "Smaller Companies Fund") and the ES River and Mercantile UK Equity Income Fund, which as at 31 December 2021 represented approximately £674 million and £116 million of assets under management respectively.

Dan is to be succeeded by George Ensor to manage the Smaller Companies Fund. George has been with RAMAM since 2014, manages the highly successful R&M UK Micro Cap Investment Company and has worked closely with Dan on the Smaller Companies Fund for a number of years.

[speedsgh] 01/2/2022 07:38

Completion of the sale of the Company's Solutions business to Schroders -

RMG has today announced that the sale of its Solutions business to the Schroders group for £230 million successfully completed on 31 January 2022 ('Completion').

The Company makes the following disclosure in accordance with Listing Rule 9.6.11.

As previously announced, James Barham has transferred with the Solutions business to a broader role at Schroders. Accordingly, he has retired as a director of the Company as at the date of Completion.

[speedsgh] 26/1/2022 14:42

AssetCo agrees £100m deal for River and Mercantile -

... Initiating coverage on AssetCo with a £20.60 price target last summer, Numis analyst David McCann noted the depth of its bench, with chief executive and deputy chair Peter McKellar, who formerly headed global private markets at Aberdeen Standard, as a critical factor.

In a statement, AssetCo said: ‘The AssetCo board believes there is a strong strategic and financial rationale for the acquisition and that a combined RMG/AssetCo business is consistent with AssetCo’s strategy to be market-leading in its chosen best-in-class investment strategies.’

The deal values the total business at £98.8m, or 114p per share, with holders to be issued with 0.0739 new AssetCo shares at yesterday’s closing price of £15.50.

The terms were contingent on the previously agreed sale of River and Mercantile’s fiduciary business to Schroders, for £230m. Taken together, the disposal valued the company at 335p per share, a significant premium to the pre-bid price of 285p.

It said shareholders will receive an immediate 220p from the Schroders deal, amounting to a total of £190m...

[speedsgh] 26/1/2022 13:56

It is intended that the Scheme Document, containing further information about the Acquisition and notices of the Court Meeting and the RMG General Meeting, together with the associated forms of proxy, will be posted to Scheme Shareholders within 28 days of this announcement (or such later time as RMG, AssetCo and the Panel agree) and the RMG Meetings are expected to be held shortly thereafter...

The Return of Capital Circular, which is expected to be sent by RMG to RMG Shareholders at or around the same time as the Scheme Document, will set out whether the Return of Capital will be implemented via the B Share Scheme or via the Tender Offer and the Tender Offer Special Dividend...

An expected timetable of key events relating to the Acquisition will be set out in the Scheme Document...

[topvest] 25/1/2022 19:31

Well not a bad result in the end. c335p in total versus my c£2 average purchase price. The continuing Assetco looks interesting, so happy to roll-over the upside into this.

[speedsgh] 25/1/2022 13:45

Recommended all share acquisition by AssetCo subject to:

~ completion of the Solutions Sale
~ the return of £190m by RIV to RIV shareholders by way of Return of Capital

The acquisition comprises 0.07392 New AssetCo shares for each RIV share and, based on AssetCo's closing price of 1550p on 24/1/2022, values each RIV share at 114.6p.

Taken together the acquisition and the Return of Capital value each RIV share at 334.9p.

The Scheme is expected to become effective during Q2 2022.

Share price reaction suggests that the market seems underwhelmed...

RECOMMENDED ALL-SHARE ACQUISITION -

[speedsgh] 24/1/2022 18:41

https://twitter.com/MarkKleinmanSky/status/1485674276187480076?t=1hqEXQP82V0Rjs-1AalnVg&s=19Revealed: The veteran fund manager Martin Gilbert's investment vehicle AssetCo is nearing an agreement to take control of River and Mercantile, the listed asset management group where he is also deputy chair; a deal could be announced as soon as tomorrow. Full story up soon.

[speedsgh] 24/1/2022 12:58

PUSU deadline tomorrow at 5pm. AssetCo's comments at the time of the last extension sounded fairly positive so I will be surprised if they don't manage to agree an offer to be recommended to shareholders. Whether that is attractive enough for RIV shareholders is another matter.

[speedsgh] 18/1/2022 08:09

PUSU deadline extended again to 5.00 p.m. GMT on 25 January 2022...

Extension of PUSU Deadline -

Statement regarding River and Mercantile Group PLC -

"We welcome the Board of River and Mercantile Group's decision to extend the offer period. Discussions have progressed over the festive period and into January. The extended period will allow us to finalise a potential offer to acquire River and Mercantile (excluding its Solutions business) for the benefit of both AssetCo and River and Mercantile shareholders.

"Over the last few weeks, we have met with additional members of the River and Mercantile team which has confirmed our view of the great potential it has as an active equity and infrastructure investment manager. River and Mercantile has the people, expertise and product offering to be a core part of AssetCo as we build an agile 21st century asset and wealth management business that meets the needs of investors."

[speedsgh] 13/1/2022 12:37

Premier Miton Group pull out of the running to acquire RIV...

Further re: River and Mercantile Group PLC -

Statement Regarding Premier Miton Group Plc Announcement -

Premier Miton abandons River & Mercantile bid -

[speedsgh] 23/11/2021 20:10

From the FT...Martin Gilbert battles rival in effort to take over River and MercantileMartin 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.