Wealth manager Rathbones confirms takeover talks with Scottish group

● Glasgow-based Speirs & Jeffrey in the crosshairs of London investment firm

Leading wealth manager Rathbone Brothers is locked in takeover talks with Glasgow-based investment manager Speirs & Jeffrey over a potential £200 million deal. Rathbones confirmed the possible tie-up in an announcement yesterday following media speculation about a combination of the businesses. London-based Rathbones said that it had notedrecentpressspeculation on the talks, adding: “Rathbones regularly assesses various acquisition opportunities in line with its stated strategy and accordingly confirms that discussions between Rathbones and Speirs & Jeffrey in relation to a possible acquisition of Speirs & Jeffrey by Rathbones are taking place.”

However,theannouncement came with the caveat that no binding offer had been made, and that there was “no certainty that any binding offer will be made nor that agreement will be reached with the board and shareholders of Speirs & Jeffrey”.

Media reports have speculated that private equity firm Permira is also weighing a bid for Speirs & Jeffrey. A Permira spokesman declined to comment to The Scotsman yesterday.

Reports have also suggested the sale of the Scottish investment management firm could land its ten partners a cash windfall of around £10m each.

It is the second time in less than a year that Rathbones has moved in on a rival in the wealth management sector, fuelling perceptions that acquisitions play a significant part in its growth strategy.

But after confirming it was in talks with Smith & Willliamson on 21 August for a combination of the businesses, Rathbones announced later in the month that talks had been terminated because of an inability to agree terms that offered “an appropriate balance of risk and reward” for its shareholders.

Smith & Williamson instead decided to go it alone and embarked on plans for a stock market flotation.

Paul Mcginnis, a wealth management analyst with broker Shore Capital, said yesterday that if a mooted bidding war between Rathbones and Permira at an estimated price of £200m proved correct it “would represent 3.6 per cent of the £5.5 billion of client assets, a premium to the levels at which a number of listed wealth management groups are trading”.

Rathbones employs more than 1,000 staff in 15 offices across the UK and Jersey.

It was founded as a timber merchants in the 1720s before later becoming an investment manager.