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Ignis £400m price tag 'inexpensive', analysts say

by Eleanor Lawrie on Mar 24, 2014 at 15:58

Ignis £400m price tag 'inexpensive', analysts say

Analysts have suggested the reported £400 million price tag that Standard Life could place on Ignis is 'inexpensive', considering it has assets under management of £68.7 billion.   

David McCann, analyst at Numis, described £400 million as a good price for Ignis. The analyst anticipates Standard Life will look to retain the assets and bring about cost savings if the deal goes ahead.

'On a headline basis it's relatively inexpensive, plus on top of that you have any synergies you can take out,' he said.

While the £2.5 billion Ignis Absolute Return Government Bond fund, co-managed by Stuart Thomson (pictured) has grown rapidly and performed well in recent time, McCann speculated that Standard Life would be looking to Ignis mainly to boost assets without having to take on a lot of infrastructure.

'As to why they would want it, there would be reasonable overlap in their front and back offices. There might be a particular bond fund they are interested in, but it would be mainly about cost,' he said.

Gordon Aitken, analyst at RBC Capital markets, described the takeover bid as a well-timed move from Standard Life.

'Their asset management business is really flying at the moment. It comes on the back of the annuities news from last week and Standard Life was one of the big winners of that because they have a big pensions side, but it is definitely good for them to diversify away from the pensions market,' he said.

'We think the price is a good one. In terms of assets under management, it's quite low,' he added.

RBC added that Ignis' suite of absolute return products could compliment Standard Life Investments' Gars range. 

At 15:55 Standard Life's share price was up 0.08% on the day, trading at 366.2 pence.


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