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Cazenove Capital confirms Schroders bid talks

Cazenove Capital confirms Schroders bid talks

Cazenove Capital and Schroders have confirmed that they are locked in bid talks, as exclusively revealed by Wealth Manager this morning.

In statement to the stockmarket, Cazenove said: 'Following recent media speculation, Cazenove Capital confirms that it is in discussions with Schroders plc with respect to a possible cash offer, with loan note alternative, by Schroders for the entire issued ordinary share capital of Cazenove Capital. There can be no certainty that these discussions will lead to an offer being made for Cazenove.'

In an annoucement shortly after, Schroders said: '[Schroders] confirms that it is in discussions regarding a possible cash offer, with loan note alternative, for the entire issued ordinary share capital of Cazenove Capital. This announcement does not amount to a firm intention to make an offer and accordingly there can be no certainty that any offer will be made for Cazenove Capital.'

Schroders has until 5pm on 19 April to announces whether it intends to make a bid for the firm.

Buxton exit

Schroders, led by chief executive Michael Dobson (pictured), is looking to acquire the boutique on news star UK equity manager Richard Buxton and two other members of its UK equity team - Errol Francis and Ed Meier are to move to Old Mutual Global Investors. It is not clear whether the talks with Cazneove Capital started before or after the trio agreed to join Old Mutual.   

The acquisition of Cazenove Capital would certainly help maintain confidence in Schroders' UK equity franchise, especially amid the threat posed by Buxton who will replicate the UK Alpha strategy he runs for Schroders when he joins Old Mutual Global Investors in June.

The Cazenove team includes Citywire AAA-rated trio Julie DeanPaul Marriage and Matthew Hudson, who have delivered strong performance on their Cazenove UK Equity, UK OpportunitiesUK Smaller Companies and UK Equity Income funds.

It also includes a respected European equity arm headed by Chris Rice, alongside a top performing multi-asset proposition led by Marcus Brookes.

The deal is also likely to appeal to Cazenove as it would give the firm access to Schroders' vast distribution capabilities across the globe.  

Cazenove Capital also operates a successful wealth management business under former Wealth Manager Cover Star Mary-Anne Daly, which could be absorbed Schroders private bank. This would be big boost for the bank after a disappointing 2012 saw profits plunge from £23.8 million to £11.8 million.  

After a number of years on the sidelines, Schroders has hit the acquisition trail again. At the end of last yearit bought US bond firm STW Fixed Income Management and prior to this it took a 49% stake in investment boutique RWC Partners in 2010.

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Richard Buxton
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106/151 in Equity - UK (All Companies) (Performance over 3 years) Average Total Return: 11.24%
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70/71 in Alternative UCITS - Long/Short Equity (Performance over 3 years) Average Total Return: -15.27%
Ed Meier
Ed Meier
57/104 in Equity - UK Equity Income (Performance over 1 year) Average Total Return: -0.17%
Matthew Hudson
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76/88 in Equity - UK Equity Income (Performance over 3 years) Average Total Return: 6.54%
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