The boards of Schroders plc and Cazenove Capital Holdings Limited have announced an agreement on the recommended acquisition by Schroders of Cazenove Capital.
Cazenove Capital Shareholders will be entitled to receive 135 pence in cash per Ordinary Share. The Acquisition values the fully diluted share capital of Cazenove Capital at approximately £424 million.
Schroders will use the acquisition to expand its private banking business and its position in UK Intermediary market.
Michael Dobson, chief executive of Schroders, said: "Cazenove Capital's culture of client focus and investment excellence are a strong fit with Schroders.
" This transaction creates a leading, independent private banking and wealth management business in the UK, and brings additional investment talent in complementary strategies across UK and European equities, multi-manager and fixed income to Asset Management. I am confident the transaction will create long-term value and benefits for clients, shareholders and employees."
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David Mayhew, chairman of Cazenove Capital, said: "Since the demerger, Cazenove Capital has achieved success for its clients and has now become one of the leading private wealth managers in the UK with a distinctive proposition and a strong brand. In addition, over the past dozen years it has developed a highly regarded Investment Funds business with excellent performance.
The proposed combination with Schroders brings together two long-standing organisations with close cultural values. It will provide an enhanced proposition for our Private Wealth Management and Charities clients, a sound strategic fit for our Investment Funds business and attractive financial terms for our shareholders. I and the Cazenove Capital board unanimously recommend the transaction to our shareholders."
Schroders Group will continue to use the Cazenove Capital names in its Private Banking business.
On the UK Intermediary side the move adds £5.1 billion of assets under management in Cazenove Capital's Investment Funds business, comprising specialist investment management, to Schroders' Intermediary business.
Cazenove Capital's highly-rated portfolio managers in UK and European equities, fixed income, multi-manager and absolute return strategies, will join Schroders' existing strong investment team.
Including Cazenove Capital's £17.2 billion of assets under management, as at 31 December 2012, Schroders' pro-forma assets under management were £229.2 billion.
Adrian Lowcock, senior investment manager at Hargreaves Lansdown, commented:  “The main reason for the acquisition of Cazenove Capital by Schroders appears to be the private banking and wealth management divisions. We do not expect Cazenove’s asset management division to be significantly affected by the merger in the early days.  We would expect any initial cost cutting and consolidation to be made in distribution and administration areas but not in the fund range of the two groups.  Cazenove’s asset management division will compliment Schroder’s existing suite of funds with Cazenove bringing across additional expertise in European equities, multi-manager and credit (bonds). ”
 
“Given the merger is unlikely to have much initial impact on the asset management business we have decided to retain both Cazenove European and Cazenove UK Smaller Companies funds on the wealth 150.  However, we will continue to monitor the situation going forward.”