View the article online at http://citywire.co.uk/wealth-manager/article/a718157
Aberdeen seals deal on £550m Swip acquisition
by David Campbell on Nov 18, 2013 at 07:13
Aberdeen has sealed the deal on its £550 million acquisition of Scottish Widows Investment Partnership.
‘This transaction is significant for the long-term prospects of Aberdeen in a number of ways,’ said Martin Gilbert (pictured), Aberdeen chief executive.
‘We are confident that this transaction will deliver considerable additional value to our expanded client base and this will therefore benefit our shareholders.’
At 8.30, shares in the business were up more than 12% at 480p.
The purchase will be funded by the issue of 131.8 million new shares to Swip owner Lloyds, equivalent to 9.9% of current market cap, in addition to a £100 million payment conditional on five-year performance.
'I am delighted to welcome Lloyds as a major shareholder in the Aberdeen group and we look forward to working with them to deliver value through this new strategic relationship,’ added Gilbert.
The deal will add £136 billion to Aberdeen’s client assets. 'This deal provides a welcome diversification of Aberdeen’s product portfolio away from traditional equity funds and into quant, passive, fixed income and property strategies,' said Jonathan Gosling of equity analyst Edison Research.
'It will be underpinned by a series of distribution agreements and strategic initiatives across the Lloyd's business.'
Alongside the purchase, Aberdeen also released full year results for the 12 months to 30 September, showing underlying profit before tax up 39% to £482.7 million.
Net revenue rose 24% to £1.07 billion. The company will pay a final dividend of 10p, increasing its full-year dividend by 39% to 16p.
News sponsored by:
As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.
Today's top headlines
From Nigeria to Pakistan and from Kenya to Kuwait, frontier markets are catching investors' attention as never before.