Rensburg, the UK private wealth manager, has rejected a bid approach from its larger rival, Rathbone Brothers. The company had already agreed a reverse takeover of London stockbrokers Carr Sheppards Crosthwaite (CSC) shortly before Christmas. CSC is owned by South African fund management group Investec.
Rathbone Brothers made its unofficial 610p-a-share bid for Rensburg just three days before Christmas, it emerged last week. The offer, which valued Rensburg at £134 million, was conditional on Rensburg aborting its reverse takeover bid for CSC. Under the terms of the reverse takeover, Rensburg will issue 38 million shares to Investec, giving the South African group a 64 per cent stake in the enlarged company.
Mark Powell, Rathbone’s chairman, said he has requested access to Rensburg’s books, and is prepared to “firm up its offer” on the basis of what it finds. Powell explained that this could mean either upping its bid, or dropping pre-conditions, but rejected the idea of mounting a hostile bid.
Shareholders said they were disappointed that Rensburg had rejected the offer, which represents a 22 per cent premium to the group’s suspended share price. However, Rensburg said the Rathbone offer did not take into account a 45p a share to its shareholders if the CSC deal goes ahead. Meanwhile, the manager of Liontrust’s Intellectual Capital Trust, Anthony Cross – which owns £1.8 million of Rensburg shares – says the Rensburg-CSC deal is worth only 520p a share and ‘looks like the sort of deal the management cooked up.’
“I don’t see it as a very attractive price,” he said yesterday. “If Investec want to be a majority shareholder why don’t they make a bid for the thing? It might protect management jobs but I don’t think it will protect the best interests of shareholders.” Other shareholders, including Legal & General, Insight Investment, HSBC and Cazenove are also reported to be uneasy about the agreed deal, and the swift rejection of the Rathbone offer.