Lloyds set to pitch in with funds fi rm
ABERDEEN Asset Management is in talks to buy part of Scottish Widows from Lloyds Banking Group in a deal creating Europe’s biggest publicly traded money manager.
FTSE 100 group Aberdeen is worth over £ 5billion and has over £ 200billion under management.
Under the deal it would issue shares to Lloyds to buy Scottish Widows Investment Partnership if an agreement can be reached, giving taxpayer- backed Lloyds a potential 10 per cent stake in Aberdeen..
Aberdeen would also make deferred payments in cash, depending on the performance of its acquisition.
SWIP manages about £ 140bil- lion on behalf of investors and has an estimated value of between £ 400million and £ 500million.
Scottish Widows’ remaining pensions, insurance and mortgages businesses would stay with Lloyds.
Aberdeen said there was no certainty that discussions will lead to a deal.
It could still face competition from rival suitors including Australian bank Macquarie. Earlier this year, Aberdeen’s chief executive M a r t i n G i l b e r t appeared to play down interest in SWIP. Yesterday, Aberdeen said it would expect any transaction agreed to be “materially earnings- pers h a r e enhancing”. It added: “It would also reinforce the company’s commitment to a progressive dividend policy and to return surplus capital to shareholders over time.”
Lloyds, 32.7 per cent owned by the taxpayer after being bailed out during the financial crisis, bought SWIP’s parent Scottish Widows for £ 7.3billion in 2000 to boost sales of life insurance and savings products.
It has been selling assets after the UK’s major banks came under pressure from regulators to bolster their capital reserves.
UBS analyst Arnaud Giblat said: “We think it is logical for Lloyds to consider selling SWIP given Lloyds’s focus on increasing its capital ratios.
“A deal would diversify Aberdeen’s products, notably in European equities.”
Aberdeen shares jumped 24 ¾ p to 450 ½ p, while Lloyds Banking Group gained 2 ¼ p to 80p.