Glas­gow’s Speirs & Jef­frey swal­lowed in £100m-plus deal

● Ac­qui­si­tion by Rath­bones will see name dis­ap­pear and wind­fall for bosses

The Scotsman - - Business - By EMMA NEWLANDS

largest in­de­pen­dent wealth man­ager, Speirs & Jef­frey, has agreed a £104 mil­lion deal to be ac­quired by Lon­don firm Rath­bone Broth­ers, in a move that will see some even­tual job losses and the Glas­gow firm re­brand in line with its new owner.

Pro­ceeds of the deal will pro­vide a ma­jor wind­fall for its eight share­hold­ers, while a pot to­talling “sev­eral mil­lions of pounds” is be­ing put aside to be shared by about 150 Speirs & Jef­frey staff.

The trans­ac­tion was orig­i­nally mooted in April. Rath­bones is to ac­quire the busi­ness – which has funds un­der man­age­ment of £6.7 bil­lion and 38 in­vest­ment pro­fes­sion­als – as it seeks to es­tab­lish it­self as a mar­ket-leader north of the Bor­der.

The ini­tial con­sid­er­a­tion of £104m com­prises £79m in cash (funded in part by a pro­posed £60m eq­uity plac­ing) and the is­sue of a mil­lion new Rath­bones shares worth £25m. Fur­ther awards worth up to a po­ten­tial £15m in Rath­bones shares may also be payable, de­pend­ing on var­i­ous tar­gets be­ing met.

All of Speirs & Jef­frey’s cur­rent di­rec­tors and in­vest­ment man­agers will be join­ing Rath­bones, and Speirs & Jef­frey chief ex­ec­u­tive Rus­sell Crichton will head up Rath­bones’ Scot­tish busi­ness which will in­clude 75 in­vest­ment pro­fes­sion­als. Rath­bones’ Glas­gow team will com­bine with Speirs & Jef­frey to con­sol­i­date the for­mer’s ex­ist­ing Glas­gow pres­ence.

Speak­ing to The Scots­man, Crichton said that af­ter a strate­gic re­view, the de­ci­sion was made to sell up as “it would be in the best in­ter­ests of our clients­forth­e­longterm”.headded that it con­sid­ered a “hand­ful” of com­pa­nies – with pre­vi­ous re­ports high­light­ing pri­vate eq­uity firm Per­mira – but ul­ti­mately chose Rath­bones, see­ing a very close fit in terms of cus­tomer ser­vice.

The Lon­don-based in­vest­ment firm said the ac­qui­si­tion, which is sub­ject to reg­u­latoscot­land’s ry ap­proval and ex­pected to com­plete in the third quar­ter, will see Glas­gow be­com­ing the group’s largest of­fice af­ter Lon­don, com­ple­ment­ing its sites in Ed­in­burgh and Aberdeen.

Such a net­work will pro­vide “very good” cov­er­age north of the Bor­der, ac­cord­ing to Rath­bones, which said the deal will in­crease its pro-forma funds un­der man­age­ment by nearly a fifth to £44.5bn, thereby re­in­forc­ing it as one of the UK’S largest firms of its kind.

Speirs & Jef­frey, which has been op­er­at­ing out of Glas­gow for more than 100 years, will re­brand as Rath­bones in June next year.

Philip How­ell, chief ex­ec­u­tive of Rath­bones, added that Speirs & Jef­frey is “very much a Rath­bones looka­like”. In terms of staffing, he said such a deal, which comes amid sec­tor con­sol­i­da­tion, inevitably re­sults in some over­lap in terms of re­source, and over time ef­fi­cien­cies will be iden­ti­fied. Most likely for re­duc­tion will be the likes of back-of­fice roles, Crichton added.

Rath­bones started as a tim­ber mer­chant in the 1720s, later be­com­ing an in­vest­ment man­ager.

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