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It’s not just about Buxton: why Schroders needs Cazenove Capital
by Dylan Lobo on Mar 22, 2013 at 14:07
The bid talks are also a sign that Schroders has finally decided to put its £1.1 billion worth of cash to good use rather than simply sitting on it. ‘Anything which sees Schroders use its excess capital is a positive,’ RBC analyst Peter Lenardos told Wealth Manager.
‘Schroders is a conservatively run business and it will pay a sensible price for Cazenove. This deal makes sense, there are plenty of synergies between the two businesses, especially on the back office and administrative side.‘
For Cazenove the big appeal of any deal would be access to Schroders vast distribution network which stretches across the globe.
To think Schroders simply made this acquisition to fill the Buxton exit, which has been grabbing the headlines for the last week would be a mistake.
‘Schroders has been around since 1804, people have come and gone before and to think they might be launching a bid for simply because one person has left would be ridiculous,’ Lenardos said.
Having said that, should Schroders launch a successful bid, no doubt the firm will draw up attractive incentivisation schemes to ensure the likes of Dean, Marriage and Hudson remain at the firm.
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