Aberdeen Asset Management PLC (‘Aberdeen’ or ‘the Group’) announces that it has entered into a definitive agreement with Credit Suisse Group AG (‘Credit Suisse’) to acquire certain fund management assets and businesses (‘the Acquired Business’) (‘the Acquisition’), subject to shareholder and certain regulatory approvals.
Summary
The purchase consideration will be satisfied by the issue to Credit Suisse of a maximum of 240 million new ordinary shares in Aberdeen, equivalent to 24.97% of the enlarged Group’s issued ordinary share capital, valued at £250 million based on the Aberdeen closing share price of 104.25 pence on 30 December 2008. The actual number of new ordinary shares to be issued to Credit Suisse will depend on the level of run-rate revenues delivered at the closing of the Acquisition, which is anticipated will take place on, or around, 30 June 2009 (‘the Closing’).
The assets under management (‘AuM’) the subject of the Acquisition were CHF75 billion (£40 billion) as at 30 November 2008, with associated run-rate revenues of approximately CHF220 million (£118 million) per annum and were this level of runrate revenues to be delivered at Closing, the maximum purchase consideration of 240 million new ordinary shares would be payable.
The Acquired Business is a long-only traditional asset manager with a leading presence in Europe, Asia and Australasia. It offers a broad product range, diversified predominantly across fixed income, money market and equities, with a variety of investment styles that will be integrated into Aberdeen’s investment processes. Its products are sold primarily to third party clients, with a significant minority of assets sourced through Credit Suisse’s Private Banking division, one of the world’s largest wealth managers.
Aberdeen has agreed an extension of the existing distribution agreement with Credit Suisse, to be signed on Closing. This will give Aberdeen greater access to the banking network of Credit Suisse.
The key benefits of the Acquisition for Aberdeen are:
- the opportunity to achieve greater scale in certain markets where the Group already has a presence, such as the UK, Australia, Germany, Switzerland and Japan. The Acquisition will also strengthen Aberdeen’s offering in certain product areas
- greater access to the distribution network of both Credit Suisse and Credit Suisse’s Private Banking division;
- the introduction of another significant, long-term, quality shareholder, whose aims are aligned with Aberdeen’s;
- the strengthening of Aberdeen’s balance sheet by the issue of new shares and a reduction in relative gearing as the Acquired Business is debt free;
- substantial cost efficiencies and enhanced financial performance through the application of Aberdeen’s efficient operating model to the Acquired Business; and
- significant earnings enhancement (before any amortisation of intangible assets) from Closing.
Commenting on the Acquisition, Martin Gilbert, Chief Executive of Aberdeen, said:
“The acquisition confirms Aberdeen’s position as a leading global asset manager and provides us with greater access to the distribution network of Credit Suisse and its Private Banking division, one of the world’s largest wealth managers.
“This transaction fits perfectly within our strategy, a key part of which has been to make earnings enhancing acquisitions which give the business critical mass in our core competencies, complementing our organic growth.
“Given our proven track record of integrating businesses, we are well placed to ensure a smooth transition of the Credit Suisse assets to Aberdeen. We look forward to welcoming our new colleagues and clients, and also to welcoming Credit Suisse as a significant shareholder in Aberdeen. We believe that this transaction will be for the long-term benefit of all our shareholders.”
Rob Shafir, CEO of Credit Suisse’s Asset Management Division, said:
“We believe this transaction offers our clients a compelling opportunity, providing them with access to an enhanced suite of investment products provided by a premier manager that historically has had strong performance across many asset classes. It also enables us to maximize the value of our Global Investors business, as we announced we would do earlier this year, and benefit from our new partner’s advantages of scale in a consolidating marketplace. ”
Martin Hughes, Chief Executive of Toscafund, Aberdeen’s largest shareholder said:
“Toscafund has already confirmed its support for this transformational acquisition, which has been made possible by the excellent operating platform offered by Aberdeen. Toscafund believes that the transaction is of clear benefit to the clients and shareholders of Aberdeen Asset Management and Credit Suisse.”
A presentation for analysts and institutions will be held at 10.00 am on Monday 5 January 2009 at Aberdeen’s offices at One Bow Churchyard, London EC4M 9HH.
JPMorgan Cazenove is acting as financial adviser, broker and sponsor to Aberdeen in connection with the Acquisition.
Enquiries
Aberdeen Asset Management PLC
+44 (0) 20 7463 6000
Martin Gilbert
Bill Rattray
JPMorgan Cazenove
+44 (0) 020 7588 2828
Ian Hannam
Piers Davison
Maitland
+44 (0) 20 7379 5151
Neil Bennett
Tom Eckersley
This summary should be read in conjunction with the full text of the following announcement (the ‘Announcement’).
This Announcement has been issued by and is the sole responsibility of the Company. No representation or warranty express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by JPMorgan Cazenove Limited or by any of its affiliates or agents as to or in relation to, the accuracy or completeness of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed.
JPMorgan Cazenove Limited is authorised and regulated in the United Kingdom for the conduct of investment business by The Financial Services Authority and is acting, as financial adviser, broker and sponsor exclusively for Aberdeen Asset Management PLC and for no one else in connection with the Acquisition and will not regard any other person as its client in relation to the Acquisition and will not be responsible to anyone other than Aberdeen Asset Management PLC for providing the protections afforded to clients of JPMorgan Cazenove Limited nor for providing advice in relation to the Acquisition or any matter referred to herein.
Certain statements in this Announcement are forward-looking statements which are based on the Company's expectations, intentions and projections regarding its future performance, anticipated events or trends and other matters that are not historical facts. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required by applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.