With financial shares heading higher as Brexit fears recede, Aberdeen Asset Management is among the biggest gainers.
The company, more than 5% better at 281.5p, has been the subject of takeover speculation recently, and analysts at Numis have taken a look at possible buyers and a takeout price. In short, major global asset managers and 380p a share or £5bn respectively. Numis said:
Following recent press speculation that the company is up for sale and a number of parties have taken an informal look, as well as our recent note highlighting the scope for an increased level of sector M&A (given a weak organic earnings growth outlook), we have taken a look at who we think could buy Aberdeen and how much we think they could pay.
We conclude that an acquirer would need to be fairly large (probably a global top 40 asset manager to have at least equal scale with Aberdeen and allow scope for reasonable cost synergies), have willingness to acquire / access to capital (ruling out some of the bank owned asset managers), have some similarity in investment approach / business model / culture and would probably lack a significant emerging markets/Asia franchise but would want one (Aberdeen’s key strategic asset that most companies would want exposure to long term in our view).
Whilst a PE deal is possible, given the lower scope for cost synergies and lesser desire to own an emerging markets franchise long term, we see these as less likely participants. We believe a realistic take out value would be around £5.0bn/380p per share (around 40% above the current market value).
Numis lists a range of possible suitors: Blackrock, JP Morgan, Capital, PIMCO, Amundi, Natixis, Invesco, T. Rowe, Legg Mason, AMG, Sumitomo Mitsui, Ameriprise, AllianceBernstein, Standard Life, Pru/M&G, Credit Suisse, Mitsubishi, Macquarie and Aviva.
This article was written by Nick Fletcher, for theguardian.com on Monday 20th June 2016 12.13 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010