Employees oppose planned £145m takeover of Scottish business
EMPLOYEES of Nucleus Financial have said they are opposed to the proposed £145 million takeover of the Edinburgh-based financial technology firm amid “significant anxiety” about the impact on jobs.
Nucleus directors last month recommended shareholders accept a 188p per share cash offer for the investment platform specialist from a rival business, James Hay Holdings.
However, the document detailing the terms of the proposed takeover shows employees at Nucleus have big misgivings about what it will mean for staff.
The document notes that a People Representative Group convened by Nucleus in accordance with regulations had initially been supportive of the idea of combining the two businesses.
However, the employee group came out against the deal after considering changes planned by James Hay, which has offices in Salisbury. James Hay is backed by the London-based Epiris private equity business.
The move by the PRG reflects concern that James Hay has said an unspecified number of jobs may be cut in central functions in the enlarged business following the takeover.
The PRG is also unhappy about the proposal to require around 230 of the 400 staff at Nucleus to transfer to FNZ, which will provide platform technology for the enlarged group.
The document states the PRG is opposed to the acquisition “on the basis of its concerns regarding the impact the proposed strategy of moving the underlying technology and operations of Nucleus”. It says the PRG is also concerned that James Hay has said the deal may be followed by “a moderate reduction in headcount where there is duplication or where operational efficiencies might be achieved”.
Feedback obtained by the PRG suggests “there is significant anxiety within the staff body regarding both the move to FNZ and the review of the central and HQ functions”.
The comments may stoke concern in Scotland about the takeover of stock-market listed Nucleus, which is a star of the emerging fintech sector,.
The document notes the process behind the acquisition was initiated by South African financial services group
Sanlam, which has a controlling 52% shareholding in Nucleus. Sanlam has given a binding irrevocable undertaking to vote in favour of the deal. Nucleus directors with shares in the firm, including founding chief executive David Ferguson, have also undertaken to back it.
The document says Nucleus directors believe the firm would thrive as an independent but the acquisition represents an attractive opportunity for shareholders to sell their shares at a significant premium to the price they fetched before James Hay made a bid approach in December.
The document notes the importance James Hay places on the skills and experience of Nucleus employees and that the review that could result in redundancies will cover the combined group.
It also notes that James Hay has said it will work with Nucleus’ management team to evaluate the existing platform arrangements and “intends no change to existing locations or place of work for employees”. Nucleus recently moved into Glasgow after acquiring a business run from the city.
The takeover must be approved by shareholders who represent 75% of votes cast at meetings that will be held on March 30.