Henderson outlines New Star bid, hopes to retain key managers

Henderson Global Investors has confirmed its bid for New Star, pledging to retain key fund managers.

Henderson chief executive Andrew Formica told Citywire shortly after the deal was announced that he believes he can keep the key fund managers in the group.

He said that discussions with the fund managers have been positive and he 'certainly anticipates' that they will be joining from the nature of the conversations he has so far had.

He was quick to claim close synergies between the teams. 'If you look at [New Star bond manager] James Gledhill coming to work with [Henderson bond manager] John Pattullo you would have to say it is the pre-eminent bonds team in the business. On the fund of funds side Mark Harris and Craig Heron will be a great team to come, particularly as [Henderson fund of funds head] Bill McQuaker has taken on a wider role of head of equities.'

He also said that he believes the property team led by Roger Dossett could find a home at the group, and picked out New Star Global Financials manager Guy de Blonay as someone he is particularly impressed by.

As both managing director for retail Mark Skinner and head of European equities Richard Pease are directors they have pledged to join Henderson for at least a transitional period.

The group has valued the deal at £115 million, the bulk of which will be spent re-paying preference shares. New Star's ordinary shareholders, including founder John Duffield, will receive just £5.4 million, valuing New Star shares at 2p.

Formica said Duffield supports the deal and recognises his time running businesses competitive with Henderson is over.

In order to re-pay the preference shares in New Star, which following a re-structuring ahead of this deal will be held by its banking syndicate, the group is issuing 22.5 million new shares which the syndicate will receive in part for the shares.

The deal includes a clause which could drop the price by up to £20 million if assets under management decline sharply during the transitional period.