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Henderson sells Towry Law to JS&P
by Cliff Feltham on Dec 21, 2005 at 09:54
Fund management giant Henderson Group is selling its IFA and insurance broking business Towry Law.
The deal leaves Henderson as a pure fund manager and gives Towry a better chance of pursuing its aim of becoming a force in the financial services advice sector.
Towry is being sold for £37 million cash against a book value of £25 million to JS&P, a Marlow-based wealth management group owned by private equity funds.
An undisclosed amount will be injected into Henderson’s defined benefit pensions scheme which will retain the liabilities of past and present Towry employees.
Roger Yates, chief executive of Henderson (HGI), said: ‘We stated at the time of listing in December 2003 that the strategic focus of the group would be the development of Henderson Global Investors as a leading investment management business. This sale delivers value to Henderson shareholders and will allow us to become, once again, a pure independent fund manager.’
In the first half of the year Towry made a profit before tax of £1.6 million compared with a loss of £100,000 last time.
Yates, commenting on current trading, said the group continued to make ‘steady progress’ and is on track to meet market estimates for the year.
However, broker Numis says sell with a target price of 55p compared with 73p in the market on the grounds that the stock continues to look expensive. At the current price Henderson is valued at £836 million.
Broker Bridgewell Securities thought the sale of Towry represented a ‘good result’ given the firm’s ‘patchy record’.
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