UPDATE: Henderson Hikes UK Fund Management Position With New Star
30 Gennaio 2009 - 10:22AM
Dow Jones News
Henderson Group PLC (HGI.LN) Friday moved to strengthen its
position in the U.K. retail fund-management industry, with its
proposed acquisition of embattled rival New Star Asset Management
PLC (NSAM.LN), which would result in the new firm having GBP59.5
billion assets under management.
Henderson said it is a "strategically compelling acquisition,"
which would significantly increase its scale and distribution in
the U.K. retail fund-management market, which has been hit from the
global economic turmoil and led to major consolidation moves in the
sector.
The enlarged group would be ranked the fifth-largest U.K. retail
fund manager by funds under management.
To help fund the agreed deal, which has a total enterprise value
of GBP115 million, Henderson plans to raise GBP65 million from a
share placement and issue. The remaining GBP50 million will come
from internal cash reserves.
The tie-up will result in integration costs of approximately
GBP31 million after tax, and is expected to be boost earnings by
2010, according to Henderson.
At present, Henderson and New Star have assets under management
of GBP49.5 billion and GBP10 billion, respectively.
Henderson also announced that it would book a profit before tax
and non-recurring items of approximately GBP80 million for 2008.The
group plans to pay a final dividend of 4.25 pence a share,
resulting in a total dividend of 6.1 pence a share for 2008, steady
from a year earlier.
Shore Capital analyst Danny Clarke said the acquisition and
terms were "broadly as expected," although "slightly expensive
versus recent deals" such as the Aberdeen Asset Management and
Credit Suisse (CS) tie-up and GLG Partners Inc. (GLG) and Societe
Generale SA (13080.FR) union.
"Price-adjusting mechanism is positive," although there are
concerns over integration and funds under management retention and
performance, he added.
Henderson's current trading is "slightly better than expected,"
said Clarke, who has a "solid hold" on the stock.
At 0809 GMT, Henderson shares were up 7 pence, or 11%, at 69
pence in a slightly lower London market. New Star shares were at 2
pence, up fractionally.
New Star, one of the better-known names with the public in asset
management, began experiencing liquidity problems late last year
and said it was exploring alternatives for its business, including
a possible sale. It disclosed Monday that it was in talks with
Henderson that could lead to an offer for the firm.
The deal is subject to approval from both set of shareholders,
the U.K.'s Finance Services Authority and other regulatory bodies.
Henderson said it hopes to complete the purchase by December.
Company Web site: www.henderson.com
www.newstaram.com
-By Lilly Vitorovich, Dow Jones Newswires; 44-0-207 842 9290;
lilly.vitorovich@dowjones.com
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