(Reuters) -UK-based acquisition vehicle AssetCo said on Tuesday it will buy investment and consulting firm River & Mercantile Group (RMG), in a deal, which along with a planned capital return, will value RMG at 289 million pounds ($389 million).
AssetCo fought off investment manager Premier Miton, which pulled out of rival talks for RMG earlier this month.
Under the terms of the deal, River & Mercantile shareholders will get 0.07392 of a new AssetCo share for each share held, totalling 98.8 million pounds.
In addition, shareholders are due a return of capital from RMG’s planned sale of its UK Solutions pensions business to Schroders, bringing their total payout to 289 million pounds.
RMG shareholders will own 41.6% of the combined group, AssetCo said in a statement.
RMG shares rose as much as 8.8% on Tuesday to a near two-month high of 322 pence, before ending the day 1.4% higher on the London Stock Exchange.
Asset managers which actively manage funds, such as RMG, have been bulking up in recent years to cut costs and fight off competition from rivals running cheaper passive, or index-tracking, funds.
AssetCo has bought three other asset management businesses in the past year.
“We are very keen on the active equity business because I think the markets are going to come our way in terms of that type of business,” AssetCo Chairman Martin Gilbert told a media call.
Gilbert, a former co-CEO of abrdn, is also deputy chairman of RMG.
Numis and Arden Partners advised AssetCo and Lazard and Fenchurch Advisory advised RMG.
Later in the day, RMG said in a separate statement that it would sell its U.S. Solutions business to Agilis Holding Co LLC for $8.6 million, adding that the transaction was expected to complete in the second quarter of 2022.
($1 = 0.7437 pounds)
(Reporting by Aby Jose Koilparambil in Bengaluru and Carolyn Cohn in London; Editing by Shounak Dasgupta, Susan Fenton, Alexandra Hudson)
