Late last year (21 December) AIM-listed asset manager River and Mercantile granted both AssetCo and what was then a rival suitor, Premier Miton, an extension until today, 18 January, to confirm an offer for the remaining share capital of the firm.
However, with the deadline looming, the confirmation had been requested by 5pm, R&M has extended the offer period by a week (25 January).
Both R&M and AssetCo released market updates within minutes of each other, suggesting this move was well orchestrated. The fact that Premier Miton recently pulled out of the deal means AssetCo is now in a strong position with regards to negotiating terms.
AssetCo had previously said the deal would be ‘highly complimentary’ and a combination of the businesses would ‘create significant value for the combined group's clients, portfolio managers, employees and shareholders’, suggesting a deal is still very much on the cards.
Martin Gilbert’s firm has stormed the AIM market since coming to fruition, outstripping its sector peers by over 100 percent in share price return terms for 2021. It already has a stake in R&M, has one of Mr Gilbert’s former colleagues taking the helm of the firm in the form of Alex Hoctor-Duncan following James Barham leaving R&M when its solutions business is finally sold to Schroders.
AssetCo’s chief executive Campbell Fleming said in a statement to the market: "We welcome the Board of River and Mercantile Group's decision to extend the offer period. Discussions have progressed over the festive period and into January. The extended period will allow us to finalise a potential offer to acquire River and Mercantile (excluding its Solutions business) for the benefit of both AssetCo and River and Mercantile shareholders.
"Over the last few weeks, we have met with additional members of the River and Mercantile team which has confirmed our view of the great potential it has as an active equity and infrastructure investment manager. River and Mercantile has the people, expertise and product offering to be a core part of AssetCo as we build an agile 21st century asset and wealth management business that meets the needs of investors."
Following AssetCo’s early forays into asset management company acquisitions, Panmure Gordon analyst Rae Maile said at the time of the small stake being taken in R&M being ““not representative of how we believe AssetCo will develop over time”.
Prophetic words and with Mr Gilbert being no stranger to boardroom manoeuvring, this deal looks to be under the total control of AssetCo, especially with his former colleague Mr Hoctor-Duncan having a strong position on the board.
However, given the strict code under which these deals operate, the Panel on Takeovers and Mergers, AssetCo had to include the following with this morning’s announcement: “There can be no certainty that a firm offer will be made nor as to the terms of any such offer”. Just another boxed ticked as this AIM-listed pocket rocket continues on its trajectory perhaps? Time will tell.
